ISLAMABAD: All Pakistan Textile Mills Association has written a letter to the Prime Minister of Pakistan, expressing its concerns over the government’s commitment to an RCET tariff of 9 cents / kWh for the FY22-23 electricity.
The Power Division had notified the discontinuation of the 9 cents tariff, leading to a charge of 20 cents / kWh starting October 1st, 2022. The notification has led to the spread of dismay, panic, and closure of factories across Pakistan.
Under these difficult circumstances, an estimated 3 to 5 million direct employees in the textile sector may lose their jobs, who are the breadwinners of 15 to 20 million people. The association has requested the Prime Minister to take appropriate remedial action to avoid this catastrophe.
Working capital requirements have increased by more than 100% due to the sharp rupee devaluation, yet working capital facilities did not enhance. In addition, FBR has not made sales tax refunds since September 13th, 2022, while a significant amount has accumulated as deferred sales tax.
Furthermore, international demand has weakened due to the worldwide recession. Without price competitiveness, Pakistan’s textile sector can’t retain its market share. In addition, the input prices need to be lower to prevent a reduction in market share, as it could be hard to regain when things turn around.
The association has requested the government to announce uninterrupted and adequate gas and electricity at regionally competitive energy tariffs across the country and the entire value chain for the full FY22-23. It also demanded restoration of zero rating (SRO 1125) to restore liquidity of the textile sector. The association sought comprehensive policy and action for the enhanced export potential of $5 billion/annum through Rs. 1 trillion invested in new projects, expansions, and upgradation. It also demanded release of material under chapters 84-85 stuck at ports and SBP to allow all export-oriented sectors to open L/Cs without pre-approval.
