ISLAMABAD, DEC 29: /DNA/ – The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel (BMP) on Sunday urged the government to ensure smooth gas supply to the local as well as the export industry so that local production and the exports could not be suffered, which have just started to show a positive trend after a long time.
Expressing serious concerns over the threats of gas supply termination and notices of additional security payment by the SNGPL the FPCCI former president and BMP Chairman Mian Anjum Nisar argued that at a time when the exports data have showed some growth the government agencies, instead of taking business-friendly measures, are creating hurdles for the industry. He quoted the latest exports data and said the exports of readymade garments rose 23.17pc by value in the first quarter and 16.16pc by quantity, while knitwear rose 14.13pc by value and 2.17pc by quantity while bedwear posted a growth of 13.31pc in value and a growth of 14.55pc in quantity, which is an encouraging sign. The government should extend its full support to continue this positive trend of exports growth through uninterrupted gas supply to the captive power plants at afforadable and competitive rates.
Mian Anjum Nisar called for swift implementation of a system based on modern technology for the selection and transmission of low-cost electricity. He wanted to complete all measures for the reform of the power sector within the specified timeline.
He warned that the continued escalation of energy prices could result in the closure of industries, amplifying unemployment rates and diminishing Pakistan’s export capabilities.
He emphasized the need for the government to explore and provide affordable energy alternatives for the industry, stressed that such measures are crucial for ensuring the competitiveness of Pakistani products in the global market. As the industrial sector grapples with the ramifications of the gas price hike, the BMP leader’s stance advocates for the preservation of industrial stability and the prevention of potential economic setbacks for Pakistan.
He said that the repeated increase in the gas and electricity prices to an unbearable level by the government has left the trade and industry uncompetitive, blaming it for trapping the country in the IMF plans.
Strongly opposing gas price surge, he said that the gas tariff hike has threatened the industrial sector, besides increasing unemployment, saying that the every government had poor economic policies that unleashed the free fall of rupee against the dollar, ensuing in input cost escalation to pull down the manufacturing growth.
He demanded the government to take back the decision of hike in gas tariff in the larger interest of national economy and to save the industries from collapse. He warned that if the decision is not withdrawn the industries will close down, resulting in decline in exports and mass unemployment.
This was 16.61 percent decline to the export target of $32.35 billion set for the fiscal year 2022-2023, he said that the export-oriented industries were faced with the greatest ever challenges in terms of the highest cost of manufacturing. Many industries, he claimed to have already stopped their production in the country with several others fearing a closure because of the unviable trade, which may also pulled the country’s exports further down.
Anjum Nisar said that the exports of textile and clothing recorded an increase of nearly 9.51 per cent in the first quarter of FY25 amid concerns that the industry was experiencing a slump.
The exports from the sector had a negative growth of 3.09pc in July, which rebounded 13pc in August and 17.92pc in September.
The BMP Chairman believed that the textile sector may struggle to compete with regional rivals due to the implementation of harsh taxation measures in the current fiscal year. However, the disruption in supply from Bangladesh has also increased the demand for Pakistani garments.
“We would like to bring to your kind notice an important issue which would hurt industrial units and their production activities.”
He said that the notices have been issued to our members having captive power facility, demanding additional security payment based on revision of share of system gas and RLNG (e.g. 25:75). These notices are not only unwarranted but also harsh steps, given the decision to terminate the gas supply from these members from Jan 1, 2025 and simultaneously serving notices for enhanced security.
“It defies logic that on one hand, the SNGPL is terminating the gas facility, and on the other, an additional demand of security is being raised. We request immediate withdrawal of these notices and ensure gas supply to industry so that exports do not suffer.”
Furthermore, the industry was disappointed with the decision to terminate the gas facility. He said that the exporters have invested heavily in setting up captive power plants, and this move will render their infrastructure redundant and their investment will be doomed.
In the light of the Petroleum Exploration & Production Policy 2009, which aims to accelerate exploration and development programs, we believe that terminating the gas facility is counterintuitive. We request that these decisions may please be reconsidered and industry may be engaged to explore alternative solutions that may balance the interests of all stakeholders.
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