Pakistan’s textile sector, which accounts for roughly 60% of overall export earnings, has announced that it has begun to lose foreign orders due to regional competitors and that new investment and expansion plans have been jeopardized as a result of the government’s decision to cut gas supplies to individual units for power generation.
Since the country is experiencing a severe gas shortage but has excess power production capability, the government gave them an alternative to getting electricity from the national grid system.
The industrialists, on the other hand, have no faith in the fragile power delivery infrastructure. Furthermore, relative to own generation using gas-fired power turbines, also known as captive power plants, power from the national grid is over 85% more costly.
According to the All Pakistan Textile Mills Association (APTMA), the CCOE’s (Cabinet Committee on Energy) decision to place a moratorium on gas/RLNG supply to export-oriented captive power plants (CPPs) would regress the export sector’s outlook and put a halt to any potential expansion or investment. The industry does not have confidence in the power sector’s ability to deliver on a consistent, reliable, and competitive basis, given its past success and regular breakdowns.
The CCOE’s previous decision to lower power prices to 7.5 cents to enable mills to turn to the grid was not adopted, and the decision to introduce a gas supply moratorium for captive power of EOUs (export-oriented units) would result in a cost rise of over 10%, according to APTMA.