Electricity, gas tariff, loadshedding: Industrial units facing increase in cost of production

Export-oriented industrial units in Multan, Bahawalpur, Sahiwal, Dera Ghazi Khan are facing 15 to 25 percent increase in cost of production because of new tariff of electricity and gas and long duration load-shedding, former Punjab minister for industries and Ex-President of Multan Chamber of Commerce and Industry (MCCI) Khwaja Muhammad Jalaluddin Roomi has said while talking to journalists here on Wednesday.
He said that export-based factories were enduring continuous power cut for six to eight hours everyday. Roomi said that most industrialists were forced to close one shift because of which thousands of workers have lost their jobs. Some industrialists had to depend on generators to keep the factory running and to meet the demand of foreign buyers. Around 50 litres per hour petrol was required for running the generators.
"If they run the generators for six hours a day, it approximately costs Rs 19,500 a day and Rs 58,500 a month. Prices of oil were changing almost every month, adding to the cost of production. Conversely, prices of goods were static in international market and profit margin had gone very low, he said. "The government increases tariff on electricity for the industries after every two months. While distribution companies are also adding the fuel adjustment charges.
On top of all, the Pakistan Electric Power Company (PEPCO) fixed line rent for industries at Rs 200,000 to 300,000 and the industries had to pay that no matter whether they were running or not," he said. He said water shortage due to power outages was also a big problem and some factories did not have their own bore wells, so they had to solely rely on electricity for running water motors.
Export of textile products from the country, during December 2008 has witnessed downward trend by 14.05 percent as compared to November 2008. He said that textile exports declined by 1.74 percent during the first half of the current financial year. Textile exports during July-December (2008-09) were recorded at $5.13 billion against exports of $5.22 billion registered during July-December (2007-08).