High power tariff worsens crisis in textile industry

Islamabad: Due to 26% increase in basic electricity tariff and 18% increase in quarterly tariff in three months, the crisis of textile industry has intensified.

The Central Power Purchasing Agency (CPPA) has spread further frustration in the industry by hinting to increase the tariff by another Rs7.13 on account of fuel adjustment.

According to Pakistan Textile Exporters Association, due to energy crisis, 50 spinning mills, 10 processing mills, while hundreds of weaving units have already closed down. The textile mills which are partially running have also started shutting down in the current situation.

It is pertinent to note that textile exporters are already facing severe shortage of capital due to delay in payment of refunds that have been pending for years, while the cost of production has more than doubled due to depreciation of rupee and high interest rates of banks.

In these circumstances, Pakistan has been left behind in the race of competition from other countries in the region and the industry has also seen a significant decrease in getting export orders from abroad.

Apart from this, due to the lack of reforms in the energy sector, there is growing frustration in the industry. The industrialists say that it is very important to continue supplying electricity and gas at competitive rates to the export industry, especially the textile sector, for economic stability in the country.

Along with this, structural reforms are also necessary to pave the way for new investments and promote industrialization in the country so that the journey of economic growth can be continued by reducing the cost of production, they added.