Govt commits cheaper RLNG to Karachi exporters in winter, says Bilwani

Published November 21, 2021
The federal government and the value-added textile sector have reached an agreement over uninterrupted supply of regasified-liquefied natural gas at a preferential rate to the export industry from December for the next three months. — Reuters/File
The federal government and the value-added textile sector have reached an agreement over uninterrupted supply of regasified-liquefied natural gas at a preferential rate to the export industry from December for the next three months. — Reuters/File

ISLAMABAD: The federal government and the value-added textile sector have reached an agreement over uninterrupted supply of regasified-liquefied natural gas (RLNG) at a preferential rate to the export industry from December for the next three months.

The export industry has held out an assurance to the Ministry of Energy to buy RLNG at $9 per mmBtu for captive power plants and $6.5 per mmBtu for their boilers, Pakistan Apparel Forum chairman Jawed Bilwani told Dawn on telephone from Karachi.

He said the understanding was reached in a virtual meeting held on Friday with Energy Minister Hammad Azhar. However, the energy ministry has not issued any official statement on the agreement so far.

Taking to the social media platform on Friday, Hammad Azhar in a tweet said, “A successful meeting held with export sectors of all provinces. They have been assured of stable gas supply during winters and in return inefficient gas captive plants will shift to power now.”

Mr Bilwani said that a number of value-added exporters of Karachi have only RLNG connections and the Sui Southern Gas Pipelines Ltd (SSGPL) is charging $15.62 per mmBtu and even on this excessive tariff the required gas pressure is not available in the pipeline.

“Even at this high rate there are also gas outages of approximately 12 hours on a daily basis during daytime,” he deplored.

Keeping this high rate and outages, Mr Bilwani termed the deal a better one in the prevailing circumstances. “The textile exporters are fully aware of the gas shortage during the winter season and admire the government support for the export industry”, he added.

Mr Bilwani said the value-added textile industry will pay the agreed rate provided the ministry ensures uninterrupted gas supply with required pressure. He also pointed out that there is a disparity in rates of RLNG across provinces.

He said Karachi-based textile exporters were deprived of concessional RLNG tariff of $6.5 per mmBtu all-inclusive or $9 per mmBtu all-inclusive provided to industries in Punjab despite fact that export industries in Karachi have a share of over 54pc in total exports from the country.

He said exporters of Karachi also demand similar concessional rates of RLNG.

Mr Bilwani suggested to the ministry of energy to play its role in the national interest by assuring and taking all necessary steps and measures to provide gas to the export-oriented industries in compliance with the sitting government’s policy for export enhancement so that exports of Pakistan must not suffer and the wheels of export industries must smoothly run during the quarter of winter season to ultimately more valuable foreign exchange for Pakistan.

According to Pakistan Bureau of Statistics data, the exports of textile and clothing posted a growth of 26.55pc in 4MFY22 to $6.02bn compared to $4.75bn over the year.

In the value-added textile sector, the export of ready-made garments jumped by 22.34pc in value and in quantity by 20.50pc in July-October 2021-22, while those of knitwear edged up 35.45pc in value, but dipped 13.11pc in quantity, bedwear posted positive growth of 21.30pc in value and 23.53pc in quantity.

Towel exports were up by 14.17pc in value and 7.75pc in quantity, whereas those of cotton cloth rose by 18.54pc in value and dipped by 76.83pc in quantity.

Published in Dawn, November 21st, 2021

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