‘Energy price-hike a last nail in coffin of industry’

F.P. Report

PESHAWAR: Khyber Pakhtunkhwa Textile Mills Association (KPTMA) shows its concerns over rise in the energy prices and claimed that it is the last nail in the coffin of the ailing textile industry of Pakistan in general and KP Textile Industry in particular, on Thursday.

In a statement issued to the print and electronic media after an emergent meeting of Khyber Pakhtunkhwa Textile Mills Association convened specially to discuss the drastic increase in energy prices and withdrawal of Regionally competitive Energy Tariff of Rs. 19.99/kWh and a gas tariff of Rs. 852/- MMBTU for gas will result in complete closure of textile industry of Khyber Pakhtunkhwa.

Chairman KPTMA, Afan Aziz said that the export oriented textile industry would be badly hit due to reversal in policy of the already committed energy tariff. He further said that 60% of the industry is already closed and the remaining 40% will be closed due to this act of government.

The textile industry will lose all export orders due to higher regional competitions and due to increase in energy prices for which industry is not ready at all, he added.
Chairman Afan Aziz and Mohammad Kamran Shah, Vice Chairman KPTMA in their statement said that export-oriented textile industry is the largest job provider and earning much needed billions of US $ annually. Due to high energy prices, the textile industry will not only lose their market share in the international market but would also force the remaining 40% textile industry of the province to close their operation.

Closure of industry would lead to massive unemployment resulting in a law & order situation on one hand and loss of export market share and much needed foreign exchange on the other hand.

Chairman KPTMA further added that energy is a key source of economic growth. Higher costs of electricity and gas directly hurt export-oriented textile industry as they are the key inputs in the production.

In addition to pushing up inflation, the big rise in energy prices will reduce real GDP and productivity. Higher energy prices have contributed to painfully high inflation, forced factories to curtail output or even shut down and slowed economic growth to the point that countries heading towards severe recession. They humbly prayed for restoration of already committed energy tariff and release of stuck up sales tax, income tax and DDT refunds to use as working capital.