LAHORE: Extreme cash flow crunch and high energy prices are hampering the export growth and adversely impacting the industry.

Exports are falling consistently both in value and quantities and the government’s immediate intervention is needed to reverse the trend. All Pakistan Textile Mills Association (Aptma) Chairman pointed out that energy cost was affecting the growth of textile industry because it has failed to expand in the world market where chea­per textile goods of regional countries are easily available.

He urged the government to rationalise both energy and gas rates, bringing them on a par with regional countries as the industry has failed to absorb or pass it onto world buyers.

He explained that the textile industry tariffs are loaded with various types of surcharges along with system inefficiencies and recovery losses.

He said the government was charging Rs3.63 per unit towards electricity surcharge which needed to be waived off immediately for the five exporting sectors.

About gas supply he said the government was providing it from domestic and imported sources at two different tariffs. “The government should provide electricity at Rs7 per unit and gas at Rs600 per million British thermal units (mmbtu) to the textile industry particularly the one located in Punjab.”

Pakistan Textile Exporters Association central office-bearers Ajmal Farooq and Muhammad Naeem, in a statement, have termed severe liquidity crunch and high energy prices as major cause of export decline.

They said massive working capital of textile exporters has been held in sales tax, custom rebate and income tax refund regime increasing the financial stress and textile exporters are unable to enhance their turnover.

Ajmal Farooq said industries in Punjab are compelled to use high priced RLNG whereas industries in other provinces are supplied system gas at reduced tariff.

Published in Dawn, March 1st, 2017