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Gas moratorium: Ministry may convene meeting of textile sector next week

ISLAMABAD: Commerce Ministry is likely to convene a meeting of textile sector next week to prepare a comprehensive strategy to deal with gas moratorium approved by the government on January 21, 2021.

The textile sector, which contributes 60 percent to the country’s exports, argues that if there is discrimination in gas supply it will not accept it.

“Any plan must be implemented without exception. Captive generation costs 7 cents thus electricity tariff for export-oriented sector has to be rationalized at regionally competitive 7 cents otherwise we will be deprived of export market we have gained in the last year,” said one of the big players of textile sector.

Government maintains that the Captive Power Plants (CPPs) are inefficient and operate at 45 percent efficiency on LNG which is an expensive fuel.

He further noted that if industry has to get gas, it has to take it directly for the machine and not for engine/steam and cost should be at par across the country.

The government’s energy cost is 3 cents while variable cost is 4 cents. If the government recovers 7 cents from industry, it would be a win win situation both for the government and industry and 3000MW electricity will be sold to the industry. The gas should directly be supplied to the boiler.

There are apprehensions in the industry that SMEs are being closed deliberately and new gas policy is being formulated only for a few people.

“It has to be one policy – that electricity will not be produced on gas. If someone says that engine will be switched off and only steam turbine will function, it is not acceptable,” he said, and warned not to make exports unviable and avoid discrimination.

The CCOE has also decided to impose a moratorium on gas supply to captive power units and incentivise them to migrate back to the national power grid. All pending new industrial connections are being expedited by the DISCOs.

The gas of CPPs, which are supplying electricity to domestic consumers, will be disconnected on February 1 and those which are export-oriented will be given the deadline of March 1, 2021.

Discos have also been bound to give connections to those industrial units by December 31, 2021, which intend to reconnect themselves to the national system. Applications for new connections of 3000MW pending with the Discos will be expedited.

Prime Minister’s Advisor on Commerce, Abdul Razak Dawood, who fought the case of industry, was not available for comments.

Copyright Business Recorder, 2021

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