Gas suspension: Pakistan loses textile exports worth $250m

ISLAMABAD: Pakistan has lost textile exports of $250 million in December, 2021 in the wake of gas supply closure to the sector in Punjab for 15 days.

According to the working done by the All Pakistan Textile Mills Association (APTMA), the Punjab textile sector has sustained losses of $250 million in exports because of suspension of gas supply in December 2021.

Shahid Sattar, Executive Director, APTMA, when contacted, confirmed that $250 million worth of textile exports were lost last month, which will never be recovered after mills in Punjab were denied gas for 15 days.

However, sanity prevailed in the government circles and the Ministry of Energy restored gas from December 29 though with less gas supply of 75mmcfd by mid-January while pledging that it will be increased up to the optimum level after the peak winter season was over.

However, sources said that the gas being supplied to the export sector is less than 75mmcfd despite the fact that the industry is purchasing gas at $9 per MMBTU instead of $6.5 mmcfd during the winters.

Meanwhile, Commerce Ministry sources said that textile mills in Punjab are not getting smooth supply of electricity from the national grid due to interruptions, causing huge losses to the industry which may go up to $250-400 million per month.

APTMA also agitated against interruptions in electricity supply in a letter to Abdul Razak Dawood, Adviser to PM on Commerce and Textiles, on Jan 7, 2021, which is causing a huge loss to the industry.

The complaint mentioned abrupt interruptions in electricity supply between January 1-5. Each interruption causes waste of half an hour and up to two hours in restarting the machinery, resulting in losing material and rendering capacity grossly underutilized, the letter said. It said that mills are currently running on 80 percent capacity, which signifies 20 percent loss of exports. And this adds up to losses between $250-$400 million in exports lost every month.

The APTMA built its case based on the grid performance in various electric power distribution companies (DISCOs). The grid daily wise report suggests that the electricity is full of jerks, low and high voltages and tripping, the letter concluded. Shahid Sattar, Executive Director, APTMA, said reportedly new machinery installed in many mills under new investments was burnt due to sudden surge in voltages.