Pakistan government to suspend gas supply for 3-month, textile exports to hit

Things are getting bad to worse for the textile industry in Pakistan. Exports growth was already down to a mere 0.4 per cent in October and may even decline in coming months if the government suspends gas supply for the next three months from December to February. According to reports, the ministry of petroleum and natural resources is likely to move a note to the Economic Co-ordination Committee (ECC), seeking suspension of gas supply to the industry for three months.

Currently, the textile makers in Punjab are supplied gas for only two days a week. Reports indicate that the textile industry, which earns half of the total foreign exchange, is estimated to incur a loss of US$2-3 billion the gas suspension plan is implemented.

As of now, the industrial sector was facing ten hours power load shedding every day, and if gas supply was totally suspended, the industry would not be able to operate. As per the Textile Policy (2009-14), it was committed to providing regular gas and power supply to the textile industry. However, the policy was never implemented in its true spirit, resulting in huge loss to the industry.

The proposed gas suspension plan would result in massive layoffs, as about 40 per cent of the total employment was generated by the textile industry. This will also nullify the impact of the European Union’s International Trade Committee voting in favour of Pakistan for Generalised Scheme of Preferences (GSP) plus. The GSP plus package of trade concessions, to come into effect from 1 January 2014, still needs formal approval of the European Parliament, before implementation.

The formal approval of the EU Parliament would allow almost 20 percent of Pakistani goods to enter the EU market at zero and 70 percent at preferential tariff, including textile and its products, which would boost exports.