Muhammad Saleem

The industry is anxiously waiting for the government to announce the winter energy package that it had pledged. Hussain, a garment exporter, said that the textile sector is in a dire situation due to the high costs of inputs and raw materials. He said that high energy prices have made it difficult for exporters to continue their operations, which is causing unemployment. He said the government had promised to announce the winter energy package in November, but no details have yet been shared with the stakeholders. “We don’t know what sort of this package will be,” he wondered. He recalled that on October 23, the Economic Coordination Committee of the Cabinet gave the nod to a massive 194% hike in natural gas prices. Just before the first International Monetary Fund review under the $3 billion short-term loan programme, the caretaker government had approved the new gas prices, the second increase in 10 months. According to media reports, the Power Division has formulated three choices for industrial consumers. The first choice carries a relief of Rs3.32 to Rs7.86 per unit, the second choice from Rs8.57 to Rs14.13 per unit and from Rs12.28 to Rs17.84 per unit under the third choice. Zia Hussain, a textile exporter, said they are waiting for the package to be announced.

He said that the underlying objective behind the winter package is to make up for the dwindling power consumption in winter and to pay the arrears to independent power producers as capacity payments. However, he said the initiative won’t bring any relief for the industry because the energy costs are already very high in Pakistan compared to the regional countries, thus making Pakistani products uncompetitive in the international market. He called for reversing what he said ill-conceived agreements with the IPPs as the government has to pay them the capacity payments whether power is used or not. Hussain said Pakistan’s industrial sector bears the brunt of inconsistent policies and high cost of doing business. Ahmed, another exporter, though welcomed the winter energy package, which is still in the works, said the industry is suffering due to high costs of energy and raw materials. An official of the Trade Development Authority said all sorts of efforts to boost the country's exports proved futile due to high rates of energy. He said the textile sector is the lifeline for Pakistan's economy, but ironically no government has ever made a sincere effort for its development.

Credit: INP-WealthPk