APTMA terms gas tariff hike ‘a blow to textile exports’

KARACHI: The All Pakistan Textile Mills Association (APTMA) Southern Zone has criticised the Economic Coordination Committee’s (ECC) recent decision to raise the gas tariff for captive power plants (CPPs) from Rs3,000/mmbtu to Rs3,500/mmbtu, calling it an anti-export measure that could prove disastrous for the country’s export-oriented textile industry, which accounts for 60 per cent of national exports.

Naveed Ahmed, chairperson of APTMA-South Zone, said that the 16.7 per cent increase in gas tariffs for industries using CPPs to generate electricity for their operations is a severe blow to the export-oriented textile sector. He described it as “the last nail in the coffin” for an industry already grappling with significant challenges in both domestic and international markets.

Ahmed highlighted the critical role of the textile sector, which serves as the backbone of the country’s exports by earning essential foreign exchange and providing direct and indirect employment to millions.

He further added that the 311 per cent increase in gas tariffs over the past two years has made the export-oriented textile industry increasingly uncompetitive in global markets, as energy costs constitute a significant share of production expenses. Coupled with the region’s highest energy costs, elevated borrowing rates and heavy taxation, the recent hike in gas tariffs is likely to erode Pakistan’s competitiveness. This decision, he warned, could derail the prime minister’s Uraan Pakistan initiative for export growth and lead to a loss of hard-earned export markets.

Ahmed pointed out that the textile industry has invested billions of rupees in gas-based power generation plants to ensure uninterrupted electricity supply for their operations, especially in Sindh and Balochistan, where power utilities such as K-El ectric and HESCO lack the capacity to provide reliable electricity. He argued that the government’s push to shift industries to grid electricity is impractical in these provinces due to the inconsistent and inadequate supply from the grid.

He also noted that the gas tariff hike specifically targets CPPs, while other sectors such as fertilizer, processing, and domestic users remain unaffected. Calling this selective discrimination unacceptable, he urged the government to reconsider its decision.

Ahmed demanded that the federal government reverse the unprecedented gas tariff hike to restore the competitiveness of textile exports, which have been steadily undermined by surging energy costs over the last two years.