No gas for CPPs: Textile Council urges govt to reverse its decision

KARACHI: The Pakistan Textile Council (PTC) has called on the government to reverse its decision of gas disconnection to Captive Power Plants (CPPs), emphasizing that uninterrupted gas supply to CPPs is crucial for sustaining industrial growth, boosting exports and ensuring long-term economic stability.

The government’s decision to halt natural gas supply to industries operating captive power plants starting February 1, 2025, as part of its commitments to the International Monetary Fund (IMF), has triggered widespread concern among the textile industry and they warn of severe impact on the country’s economy and exports, if the decision is implemented as per plan.

PTC is a platform for the Pakistan textile and apparel sector and represents top textile companies in Pakistan, which are the most progressive textile and apparel manufacturers in Pakistan.

Fawad Anwar, Chairman PTC, criticized the move, citing a host of adverse effects it would have on Pakistan’s economy. “This decision will shut down the majority of industries, as they lack alternative energy sources and ultimately result in massively reduced exports and exacerbate unemployment,” he added.

He said that the government’s decision is totally illogical and would result in unrecoverable loss to the exports as well as economy. “Suspension of gas supply to industries for CPP will totally close down a number of the industry as many industries rely on captive power plants for their energy needs and it does not have alternative forms of energy,” he added.

He warned that this decision would undermine the government’s efforts to boost exports and generate foreign exchange. With industries unable to compete in the global market, this move will lead to a significant decline in Pakistan’s exports.

In addition, closure of industry due to no alternative source available will create massive unemployment resulting in social unrest throughout the country, he added.

Fawad said that the power company does not have infrastructure to provide electricity for new or enhanced connections and asked some companies for a two-year period for connections with a cost of infrastructure which is in billions.

He said that the private sector consumes gas only for their own power generation as gas in Pakistan is the most expensive gas in the region. Private sector ensures that gas is used in the most efficient manner and most of the companies’ efficiencies are close to 65 percent or more as they ensure most of the heat is captured through heat recovery systems, he added.

Chainman PTC claimed that the industrial sector is subsidizing gas being provided to the fertilizer sector and domestic consumers. With suspension of gas to industries for CPP, the government will be required to pay subsidies from its own resources and result in a circular debt for Pakistan, he said.

“We feel this is an illogical decision and should be reversed immediately to ensure uninterrupted supply of gas to all industries to ensure growth and exports,” he demanded.

PTC argues that uninterrupted gas supply to captive power plants is essential for sustaining industrial growth, safeguarding exports, and maintaining social stability. A blanket disconnection of gas supply will cripple industries that are the backbone of Pakistan’s economy, it added.

Copyright Business Recorder, 2024