Federal Minister for Commerce, Industries and Production Dr Gohar Ejaz and Federal Minister for Energy Muhammad Ali have discussed in detail the energy issues with members of All Pakistan Textile Mills Association, assuring them of improving energy supply at affordable tariff to make exporters competitive in the global supply chain.
Both the federal ministers visited APTMA on Thursday. Central Chairman Asif Inam, Chairman North Hamid Zaman and leading textile manufacturers welcomed them on the occasion. The entire APTMA leadership, including former chairmen Aamir Fayyaz, Ahsan Bashir, Ali Pervaiz Malik, Adil Bahsir, Ali Ahsan and leading textile exporters speaking on the occasion stressed the need of energy in terms of availability and affordability.
Federal Energy Minister Muhammad Ali said the federal government would consider positively different options to resolve exporters’ energy issues. He said the government was working on multiple fronts like wheeling charges, tariff rationalization, strengthening Boards of Discos for good governance and their ultimate privatization.
According to him, there is also a proposal of converting coal power plants on indigenous coal instead of imported one to bring down energy cost. Furthermore, he said, the ministry was also considering to enhance payment period of independent power producers (IPPs) to stabilize cash outflow and thus brining down energy cost in the country.
On the gas side, he said, the government was working on bringing in third terminal besides working on long term contracts for import of LNG gas. He said the government would also increase domestic gas tariff, however, there would be no burden on the low income class.
He made it clear that the industry was priority number one of the government. According to him, the concept of Weighted Average Cost of Gas (WACOG) was not available in the law. Also, he added, the government cannot violate the Constitution, which establishes first right of use for the province wherefrom the natural resource generates. He said the Southern part of the country has more natural gas than the Northern part, therefore, the price of gas is cheaper there. However, he expressed the hope that the difference would get mitigated in future when gas reserves of South would deplete with the passage of time. Already, he said, the natural gas availability has reduced by 20 percent in the country.
Speaking on the occasion, Federal Commerce Minister Dr Gohar Ejaz said he has fixed a target of generating $10 billion additional exports during the current fiscal to meet $37 billion target, which requires Regionally Competitive Energy Tariff (RCET). He also agreed that the industry requires reduction in energy cost to achieve $10 billion additional exports by competing regionally.
According to him, all the new textile mills are obtaining gas supply at $13 per MMBTU against $8.5 per MMBTU for the existing mills both in North and South zones. There is a need to eliminate a discrimination within the industry, he stressed.
He also supported the idea of supplying electricity to the export-oriented industry against wheeling charges by activating 1300 megawatt power plant in the province of Punjab.
He said the Special Investment Facilitation Council (SIFC) has curbed smuggling of imported clothes in the country worth $3.5 billion, which is an opportunity for the manufacturers of synthetic fiber to fill the gap and meet the domestic demand. The SIFC has also controlled smuggling, flight of capital and dollarization of savings to bring interbank rate below the open market rate, he added. The Actual value of the dollar, he said, should be Rs260 on real effective exchange rate.
He appreciated the Punjab caretaker Chief Minister Mohsin Naqvi for cultivating cotton crop at 5 million acres against the earlier 3.3 million acres filed, hoping to get 12 billion cotton bails this year. He appreciated the industry for its full support to the government on this front.
He said his ministry would soon issue $100 billion export policy for the next five years out of which $50 billion exports would be earned by the textile industry