APTMA Opposes Gas Price Hike, Cites Export Risks

APTMA Opposes Gas Price Hike, Cites Export Risks

Karachi, January 27, 2025 – The All Pakistan Textile Mills Association (APTMA), Southern Zone, has termed the Economic Coordination Committee’s (ECC) recent decision to increase the gas tariff for Captive Power Plants (CPPs) from Rs. 3,000/MMBTU to Rs. 3,500/MMBTU as disastrous for the country’s textile exports. The textile industry, which accounts for 60% of Pakistan’s total exports, faces significant challenges due to this decision, APTMA emphasized.

In a statement issued to the media, Naveed Ahmed, a representative of APTMA, highlighted that the 16.7% increase in gas tariffs for CPPs would severely impact the export-oriented textile sector. He described the hike as the “last nail in the coffin” for an industry already grappling with multiple challenges in both domestic and international markets. APTMA underscored that the textile sector is the backbone of Pakistan’s economy, earning critical foreign exchange and providing employment to millions directly and indirectly.

APTMA pointed out that the cumulative increase of 311% in gas tariffs over the past two years has rendered Pakistan’s textile exports uncompetitive in global markets. Energy costs, being a major component of production expenses, have skyrocketed, making Pakistani textiles the most expensive in the region. APTMA warned that the high cost of borrowing, heavy taxation, and now exorbitant energy prices are eroding the competitiveness of the industry. The recent tariff hike threatens the export growth targets set by the Prime Minister under the “Uraan Pakistan Program” and risks losing valuable international markets.

Naveed Ahmed elaborated that the industry had invested billions of rupees in gas-based CPPs to ensure uninterrupted electricity for their operations, particularly in Sindh and Balochistan. These regions suffer from unreliable electricity supply, with companies like KElectric and HESCO unable to meet the required demand. APTMA criticized the government’s policy of encouraging the use of grid electricity over CPPs, arguing that it is impractical given the grid’s poor capacity and inconsistent supply in these provinces.

APTMA further noted that the tariff increase is discriminatory, as it targets CPPs while sparing other sectors, including fertilizer, processing, and domestic users. This selective policy has been firmly rejected by APTMA, which called it unjust and harmful to the country’s export sector.

APTMA has urged the federal government to reverse the gas tariff hike immediately to prevent further damage to the textile industry. The association emphasized that without competitive energy prices, Pakistan’s textile exports would continue to decline, undermining the industry’s pivotal role in the economy.