Industry for implementing ECC decision of energy tariff cut

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Industry for implementing ECC decision of energy tariff cut

November 16, 2018

Lahore, November 16, 2018 (PPI-OT): As the delay in the implementation of energy affordability initiative of the government has panicked the Punjab industry, the value-added knitwear industry has asked the government to get the ECC decision of lowering energy tariff implemented so that production could be maximized to enhance the exports.

Pakistan Hosiery Manufacturers and Exporters Association Chairman Adil Butt stated that the new government had announced to provide gas and electricity to the five zero-rated exporting sectors at regionally competitive rates. It was later endorsed by the Economic Coordination Committee (ECC), which was unfortunately not implemented so far.

He said the ECC had also decided that gas supply from SNGPL to the industrial sector in Punjab and Khyber Pakhtunkhwa will be provided at $6.5/MMBTU- similar to the consumers of SSGC in Sindh. Adil Butt stated that the role of value added textile is vital in the national exports and the government should accord top priority to this sector taking necessary steps and measures to enhance its export efficiency.

He said that the export oriented industry is already facing multiple challenges in the wake of high cost of manufacturing, exorbitant utility tariffs and high labour wages comparing to the competitors on the world markets. Comparison of gas price of Pakistan with regional competing nations: the gas/mmbtu including GIDC inputs of Bangladesh and India is $3.22 and $4.66 while electricity/kwh is $0.09 and $0.09.

He asked the govt to notify the new gas tariff for the export industry at $6.5/mmbtu and electricity at 7.5 cents/kWh to enable the exporting industry to focus on increasing exports. He said the industry was not in a position to pay the new bills of gas at the price of $12.54/mmbtu. “We appreciate the govt efforts to reduce the cost of manufacturing and make the value added textile export industry more viable,” the chairman added.

He asked the Commerce Ministry to work on rationalizing duties structures and minimize taxes and duties on import of raw materials and instead apply duties on import of finished / luxury goods in order to facilitate the domestic industry. The Ministry should also hold the meeting to simplify the DTRE Scheme and make Soft DTRE with improvement in rules and system. He suggested the Commerce Ministry to work on a strategy to discourage export of raw material and encourage export of value added items.

He reiterated the request of Value Added Textile Exporters to recommend the State Bank of Pakistan to allow facility for exporters’ Authorized Dealer to make import advance payments against irrevocable Letters of Credit (L/C) upto 100% of the value of the goods and upto US$10,000/- per invoice for the import of all eligible items without the requirement of L/C or Bank Guarantee from the supplier abroad. He informed that to earn more foreign exchange and enhancement of exports, it is imperative that Pakistani Value Added Textile Industry should do more value addition with domestic cotton and yarn.

For more information, contact:
Central Office,
Pakistan Hosiery Manufacturers and Exporters Association (PHMA)
PHMA House, 37-H, Block-6, P.E.C.H.S., Karachi, Pakistan
Tel: +92-21-34544789, 34522685, 34522769
Secretary General +92-21-34545683, 34544764
Fax: +92-21-34543774

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