Concerned with reports of federal government's decision to increase gas tariff from next month, the All Pakistan Textile Mills Association (APTMA) has urged the government to review this decision in the best interest of the domestic industry.

Chairman, APTMA Sindh and Balochistan Region, Tariq Saud, has said the proposed increase in gas tariff from April 1, 2015 by 64 per cent per MMBTU is punitive and unjustified. The huge raise in tariff would cripple the entire textile value chain, which is using gas for power generation and processing, he said adding that the decision would erode viability of the export-oriented industry, as it was already hit hard by the over-valued currency phenomenon.

An increase by Rs 262/MMBTU would push up gas prices to Rs 750/MMBTU. It would push up the proportion of energy in the cost of production by another 20 per cent, resultantly the country’s textile products would become uncompetitive in the international market, Saud added. He also demanded the government to remove inefficiencies in the system to ensure adequate and non-discriminatory supply throughout the country.

The tariff increase would divert an extra Rs 67 billion for the gas utilities, which could lead to thwarting of any effort to improve efficiencies in the system. The government needs to come up with a workable solution and bring the energy cost at par with competitors in the region, as sizeable quantities of basic textile from regional competitors had already started making inroads into domestic market, threatening the very existence of the local industry, he said.