Textile industry blamed for inappropriate use of energy

LAHORE: Coming down hard on industrialists for not using grid-power available on special tariff, ministry of Energy has accused textile sector of acting inappropriately regarding the use of electricity.

“It is unfortunate the industry is hell-bent upon inefficient use of natural gas for meeting energy needs and by doing so, industrialists are not only behaving irresponsibly but are regretfully backtracking from agreed points regarding energy package being offered by the Ministry of Energy,” a senior ministry official told The News.

“The government cannot provide costly Regasified Liquefied Natural Gas (RLNG) in bulk to industry, which is being used for producing power despite the fact that electricity is readily available from the national grid at an agreed special tariff of $0.09 per unit.”

The official said industry failed to switch to grid power despite the lapse of three deadlines given by the government.

“It is a highly irresponsible behavior of the industry as they failed to benefit from the flat power tariff despite almost all having standby connections,” said the official.

All Pakistan Textile Mills Association (Aptma) recently asked the government to allow provision of natural gas for a year even at an elevated RLNG tariff of $9/mmbtu instead of $6/unit.

The Ministry of Energy agreed to supply RLNG, saying it will depend on the available supplies and affordability of import price of LNG.

“We were trying our best for meeting energy demands of the industry but we were surprised to know that the textile body challenged the gas tariff in the court of law and eventually got a stay order in their favour.”

The senior official made it clear it would not be possible for the government to provide RLNG imported at $12-15/unit to industry at $6.5/unit for merely producing electricity in an inefficient way, that too for selling power.

“Almost half of such beneficiaries are not even exporters,” the official claimed.

So it would not be a prudent approach to continue to supply RLNG to industry for inefficient use by spending up to Rs70 billion subsidy annually, he observed.

The senior official also expressed displeasure over industry's move against introducing heat recovery at captive power plants in a bid to increase efficiency.

“The approach of industry is simply incomprehensible over use of energy,” he said adding, “How can we stop gas supply to efficient power producing plants tied to the national grid, which pay $12/unit for diverting gas to inefficient small captive power units at mere $6.5/unit,” he said.

Moreover, the ministry official said, industry was also lower on priority list so the government was left with no option but to snap its gas supplies.

However, he made it clear that they had only cut power supply to captive power and gas was still available to industry for processing.

Reacting to the government's move to suspend gas supply to captive power plants, Abdul Rahim Nasir, Chairman Aptma told The News textile mills had been facing closure in Punjab due to suspension of energy supplies.

Nasir said as many as 140 industries remained closed as no electricity was available last night, adding, there were major fluctuations and trippings too, disrupting electricity supplies to industry.

In a statement, the textile body asked the Prime Minister to restore power and gas supply to the textile industry. Chairman Aptma demanded of the Prime Minister Imran Khan to intervene immediately to ensure supply of electricity and gas to textile units.

Nasir said on top of gas supply suspension, due to cold weather, power supply from power transmission lines had also been adversely affected, suspending production at textile mills.

Chairman Aptma hoped Prime Minister would take steps for immediate redressal of the problem.

With suspension of gas supply to the textile industry in Punjab, the country would default on billions of dollars’ worth of export orders, Aptma said in their letter to Prime Minister.

Shahid Sattar, Executive Director of Aptma, said if the sector was pushed against the wall and their concerns were not addressed, the workers and their families would take to roads.

“And 70 percent of the country’s textile industry is based in Punjab, the suspension of gas will bring 80 percent of the industry to a complete halt,” the letter said. It added that it would have an extremely negative impact on exports and would bring to an end the extremely positive increase in exports and investment witnessed during the last year.

“And if we are unable to deliver goods on order, orders once lost will be a permanent loss to Pakistan, and extremely difficult if not impossible to reverse,” the letter argued.

Meanwhile, the gas utility claimed that uninterrupted supply of gas to export and general industry sectors continues for processing.

According to a spokesman of Sui Northern Gas Pipelines Ltd (SNGPL), supply to captive power had only been suspended. “The company continues to supply gas to 1,900 of the 2,300 industries on the network while gas supply to only 400 Captive power units has been suspended,” the spokesman said. He added that ex-WAPDA power distribution companies were capable of providing abundant electricity to industries at cheap rates in winter.