Southern Zone: APTMA terms decision to increase gas tariff for CPPs anti-textile exports

KARACHI: All Pakistan Textile Mills Association (APTMA), Southern Zone terms Economic Coordination Committee’s (ECC) recent decision to increase gas tariff for Captive Power Plants (CPPs) from Rs 3,000/MMBTU to Rs 3,500/MMBTU anti-textile exports, which will prove disastrous for the export-oriented textile industry having 60 percent share in the exports of the country.

Naveed Ahmed, Chairman, Southern Zone said the recent increase in gas tariff by 16.7 percent for the industries having CPPs and using gas for generation of electricity to operate their mills is the last step in the coffin of the export-oriented textile industry which is already facing numerous challenges in the domestic as well as international market.

He said textile sector, the backbone of the country’s exports, is not only earning much needed foreign exchange for the country but also providing employment to millions of labour force directly or indirectly.

He further said that due to an astronomical increase of 311 percent in gas tariff during the last two years, the export-oriented textile industry is becoming uncompetitive in the international market as the energy costs account for a large share in the cost of production of textile goods, therefore with the highest energy cost in the region, highest cost of borrowing and taxation, the Pakistani textiles will be uncompetitive on the international market.

“The recent decision of increase in gas tariff for CPPs will not only prove to be detrimental in achieving the target set by the Prime Minister for export growth in Uraan Pakistan Programme but would also loose the hard-earned exports markets,” he added.

Naveed said that industry has invested billions of rupees in gas-based power generation plants for generation of uninterrupted electricity for their own consumption as the electricity supplying companies in Sindh and Balochistan do not have the capacity and capability to provide required load of uninterrupted electricity to the industry.

He further said the government was trying to encourage the use of grid electricity instead of electricity produced by gas based CPPs, without realising that this policy is not implementable in Sindh and Balochistan due to poor capacity and inconsistency in supply of grid electricity.

He noted the government had increased the gas tariff of CPPs only, and all other sectors including fertilizer, processing and domestic had been left unchanged. “This targeted discrimination is not acceptable and hence rejected,” he added.

He demanded the federal government to reverse its decision of unprecedented increase in gas tariff to make textile exports competitive on the international market which was being continuously eroded by surge in energy prices during last two years.

Copyright Business Recorder, 2025