Phenomenal ill-planned growth in CNG sector has resulted in nothing but total collapse of the rest of industrial and manufacturing sectors of the country, particularly textile industry, which tops the list of those that have incurred most damages, according to sources in textile sector.
There has been insufficient gas supply to local textile industries, causing irrecoverable damages to this sector, which is now on the verge of collapse. According to All Pakistan Textile Mills Association (APTMA), the year 2010-11 appeared to be the worst year for the local textile industry, as it negatively faced more than 170 days of gas curtailment. During the financial year 2011-12, textile sector recorded 22% decrease in total export of cotton cloth, 94% decrease in export of combed or carded cotton, 11% in export of cotton yarn, 38% in knitwear, 70% in non-cotton yarn, 22% in towels, and 40% decrease in export of bed wear.
As per APTMA sources, the value of loss for the local textile industries is now estimated to be over a billion dollars per month. This all has been due to flawed gas allocation policy initiated by the Government of Pakistan, which allocated minimum gas supply to the textile sector, as compared with the CNG sectors consuming a large portion of the total gas supply.
At present, the demand of gas from CNG sector is 325 mmcfd while the gas supply is around 265 mmcfd. As per APTMA officials, the commercial sector, on the other hand, gets 80mmcfd of gas, but textile sector suffers most due to this ill distribution of gas amongst different sectors of economy.
The current gas supply priority list shows that CNG sector stands second in the list, after domestic consumers. In contrast, the textile sector which is supposed to be one of the largest cotton-producing countries of the world has been put lower in the gas supply priority list.
Sources said that for instance out of 3000 CNG stations, even if 1/3rd are shutdown, total labour force that may become unemployed would be around 15,000 but 100 mmcfd could run a large number of big textile units that employ thousands of workers.
Along with the prevailing gas crisis, the textile industry is also suffering from acute power shortages, and has steadily adapted to this power shortfall by installing power generation plants which run on pure natural gas.
In order to meet the energy shortfall, nearly 80% of the local textile units have already shifted to natural gas in Punjab only. Because of the increased demand of gas by the CNG stations as well as domestic consumers, the essential gas supply to the textile industry has been curtailed to the minimum.
As a result, this export oriented industry has significantly witnessed almost 35 percent decrease in entire productions, now resulting in workers layoffs and unemployment of skilled human resources, untimely delivery of export orders to international textile markets, and almost zero percent new investments made in the sector in the recent period due to shortage of energy.
Once considered backbone of national economy, textile industry in Pakistan is now walking on crutches, and despite having the immense potential to compete with the regional players, textile sector seems to be suffering at the hand of CNG sector, which is affecting the overall growth of export-oriented textile sector. Previously known as the land of textiles, Pakistan, as a result, has gone astray with no single industry to represent herself proudly at the international level.
Not only textile, other manufacturing sectors of economy are also suffering badly. According to an Asian Development Bank report if country transfers only 100 mmcfd gas from CNG to fertiliser sector, based on the current estimates, this could translate into savings of Rs 23 billion per annum for the government.
Moreover, if 100 mmcfd is made available for non-winter months on a continuous basis, urea prices could also come down by around Rs 350/bag (reversal of shutdown related increases) which could yield a saving of Rs 42 billion for the farmers per annum as price will come down for entire 6 million tons bought by farmers. Sources said that Pakistani Farmers need more subsidy than the car owners and transporters getting CNG at 55% of petrol price, while farmers are forced to buy urea at the double of the price.