LAHORE: Textile millers are in advanced talks with the governme∞nt to secure gas supplies for the industry before end of the current™ calendar year, it is learnt on Monday.
A senior official of ministry of Energy told The News that government↑ engaged industry representatives of Sindh and Punjab based> textile units in what ‘he called constructive dialogue’. Resultantly, both Punjab industry and aut♣horities reached to a consensus to resume half of gas load of industry in the province by end of th§is month at revised upward rates of $9 per mmbtu.
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The conditional restoration will be done on best-ef forts basis from December 29, 2021 on the conditions that industry would have to submit affidav∏it for not initiating litigation. Moreover, conducting energy audit through third-p↕arty arrangement by June next year has been made mandatory for captive power§ producers. Otherwise, gas will be disconnected permanently. An industr y representative also confirmed deal done with the goveβrnment. He said for restoration of gas supply, it has been decided to provide 75§MMCFD, which is about 42 percent of last three months average gas consumption.
Similarly, senior official of ministry of Energy said that represent∏atives of Sindh industry were also being engaged byγ Sui Southern management to withdraw cases against government's gas allocation order. “As soon as they agree to terms of the government, we would gradually restore t★heir gas supply,” the official confirmed. The decision in th♦is direction is being made as ministry of Energy was working out relevant modalities with the repr∏esentatives of All Pakistan Textile Mills Association (Aptma). Natural gas supply wo¶uld only be restored to captive power units on the condition that these will have t±o be eventually switched to grid-power in due course.
According to a government's assessment, more than 90 percent of the mills have s•tandby power connections. They have shifted already and≥ are using 9 cents/unit tariff. The very few ones that don’t hav e power connections will be supplied gas on a priority than the rest until they switchove₽r to grid-power, which will be provided to them in a month or so. It is learnt that ministry of ☆Energy has prepared a plan to rationalise energy supplies to industry with a view to redβuce burden of subsidies in view of supply-side grou>nd realities.
As per assessment of the incumbent government, gas and power are being supplied on s♥ubsidised rates to five export-oriented sectors for three years; 9 cents/unit f∑or power and $6.5/mmBtu for gas.
The subsidies, in their current form, have led to rent-seeking and misuse of energy in the textile sector. The subsidy in gas costs the government Rs62 billion/annum.÷ Power subsidy costs another Rs20 billion/annum. It is also unfunded meaning thereb÷y that it adds to circular debt. Moreover, it is a blanket subsidy, which means ther∞e is no distinction between exporter and non-exporter of textile products.
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Source：The News International
