October 26, 2023 (MLN): The All Pakistan Textile Mills Association (APTMA) has welcomed the Economic Coordination Committee's (ECC) long-awaited decision on gas/RLNG pricing reforms, said a press release issued yesterday.
Over the past months and years, Pakistan has witnessed severe distortions in gas/RLNG pricing that hindered economic growth, caused manufacturing activities across the country to grind to a halt, led to a loss of exports and investment worth billions of dollars, stopped investment in new gas field exploration, and led to the build-up of Rs3 trillion in gas sector circular debt.
A solution was urgently needed to address these problems and the current decision is a most welcome departure from the poor policies of the past and a step in the direction of achieving sustainable and inclusive economic growth.
Reforms in gas pricing will help ease the burden of the textile industry's current crisis.
Over the past 6 months, the industry in Sindh has faced gas load shedding 2 days a week resulting in over 30% of the production capacity being forced towards closure.
APTMA stated that it hopes these current reforms will put an end to gas load shedding for industrial consumers and improve gas pressures that will boost productivity allow maximum utilization of production and export capacity and incentivize the inflow of fresh investment into the sector.
These reforms will also bring much-needed certainty as to the availability of gas/RLNG and provide exporters with a forward-looking view with regard to processing export orders and hedging against different kinds of risks.
Given the reforms, the government can now arrange additional RLNG to address the domestic gas shortages and ensure adequate availability of gas/RLNG across the country.
Removing distortions in gas/RLNG prices will also incentivize fresh investment in gas field exploration activities that will, over the medium term, ease the indigenous gas shortage, and help ease Pakistan's balance of payments and external debt difficulties by reducing its dependency on imported energy.
“We are extremely thankful to the Minister for Commerce Dr. Gohar Ejaz, Minister for Energy Mr. Muhammad All and Minister for Finance Dr. Shamshad Akhtar, as well as the ECC for their continued efforts to support Pakistan's export industry and move the country towards economic growth and prosperity,” the notice reads.
Moreover, APTMA hopes that the government will follow up on gas reforms by implementing reforms in the power sector to allow export-oriented units to benefit from competitive electricity prices.
Posted on: 2023-10-26T16:05:10+05:00
