Aptma blasts gas supply shutdown to textile sector

KARACHI: The gas supply shutdown to the Punjab textile sector will worsen the balance of payment crises as the sector is a big contributor in bringing foreign exchange in the country, an official said on Friday.

All Pakistan Textile Mills Association (Aptma) Chairman Rahim Nasir said that the gas or regasified liquefied natural gas (RLNG) supply to the Punjab textile sector, which was at only 25 per cent of required volumes, was shut down two days prior with the guarantee that supply would be restored on the morning of Friday June 3, 2022.

However, it has now been stated that the supply will not be restored for an indefinite period, he added.

Textiles is the only sector that continues to grow and bring foreign exchange to the country, gearing up to close at $20 billion in June 2022, compared with $15.4 billion in June 2021.

“Gas/RLNG is being continuously supplied to non-export industries and not the export sector, against all economic rationale. The government’s decision to halt the gas supply to exporters is highly illogical as it is a critical input to textiles, the single largest contributor to Pakistan’s exports and the mainstay of Pakistan’s economic future,” Nasir said.

“The sector has sizeable investments in state-of-the-art machinery and high efficiency generation, with over $5 billion worth of investments for expansion and modernisation made in the last 1.5 years,” he added.

The industry can bring substantial economic benefit from enhanced exports if stable and consistent supply of gas is guaranteed, while new plants and expansions completed since November 2021 are still awaiting gas supply.

The Aptma chairman urged the government to restore the priority of the export industry and to recognise the losses and damage to Pakistan’s economic future this will cause.

A loss in production will lead to a further loss of exports and the need for billions of dollars in additional loans, Nasir said, adding that due to poor quality grid electricity and shutdown of gas supply, the mills are operating at less than 75 per cent capacity, which if continued will incur a loss of $250 to $400 million in exports each month.

The Aptma chairman said that the gas supply and priority must be restored with immediate effect so that exports and economic growth are able to continue on an upward trajectory.