Export sector complains non-compliance by power utilities

Export sector complains non-compliance by power utilities

KARACHI – The zero-rated textile export sector in Pakistan has raised concerns over the non-compliance of power utility companies in providing subsidized rates, according to a letter addressed to Abdul Razak Dawood, the Adviser to the Prime Minister on Commerce and Textile Industry.

The Pakistan Hosiery Manufacturers and Exporters Association (PHMA) highlighted the alleged violation of Para 3 of SRO 12(I)/2019 dated January 01, 2019, by power distribution companies and K-Electric, in contradiction to the government’s approved policy and subsidized electricity tariff net rate of 7.5 cents per kWh.

The PHMA emphasized that the power division had previously revised the electricity tariff for zero-rated industrial consumers, fixing it at the rate of 7.5 cents per kWh. This move was intended to support exporters in enhancing their exports, thereby contributing to the generation of precious foreign exchange for the country.

However, in a recent revelation, the export sector received bills for January 2019, indicating that the electricity providers across Pakistan were charging rates ranging from 8.7 cents to 9.1 cents per kWh. This discrepancy between the billed rates and the government-approved subsidized electricity tariff of 7.5 cents per kWh has raised concerns within the textile export community.

The PHMA expressed disappointment over the utility providers’ alleged violation of the approved policy and subsidized electricity tariff, considering it highly deplorable. The sector, crucial for the country’s economic growth, believes that such non-compliance could hinder the competitiveness of Pakistani textile exports in the global market.

In response to the issue, the Adviser to the Prime Minister on Commerce and Textile Industry has been formally approached by the PHMA, urging him to intervene in the matter. The association has requested Dawood to take up the issue with the power division, ensuring compliance with the approved policy and the enforcement of subsidized rates for the five zero-rated export sectors, maintaining the rate at 7.5 cents per kWh.

The PHMA emphasized the importance of adhering to the government’s policies to create a conducive environment for the export sector to thrive. Subsidized electricity rates play a crucial role in boosting the competitiveness of Pakistani products in the international market, allowing exporters to offer more competitive prices and maintain profitability.

As the government is actively promoting exports to strengthen the national economy, resolving issues related to subsidized electricity rates for key sectors like textiles is essential. The textile industry, being a major contributor to Pakistan’s economy, requires the support and cooperation of various stakeholders to ensure its sustained growth and global competitiveness. The prompt intervention of the Adviser to the Prime Minister on Commerce and Textile Industry is anticipated to address these concerns and foster a more favorable environment for the textile export sector.