August 04, 2013
Textile exporters have rejected the recent hike in power and petroleum product prices as it would trigger inflationary impact and would ultimately affect the overall trade and business environment. Criticising the tariff hike, Asghar Ali, Chairman and Muhammad Asif, Vice Chairman Pakistan Textile Exporters Association, said businesses are already facing tough challenges and further increase in Petroleum prices and power tariff will create enormous inflation and great pressure on the business activities.
Power tariffs in Pakistan are already one of the highest in the region due to which Pakistani products are losing competitiveness in export markets. In China, India, Bangladesh and other countries electricity is available to industrial sector at lower rates than commercial users while in Pakistan, power rates for industries are higher than commercial consumers. The decision to increase oil and power prices, particularly at a time when the economy is struggling for revival, is not in favour of business growth. They said increasing power and Petroleum prices would unleash a new wave of inflation and raise cost of doing business in the country. Instead of increasing petroleum prices, government should decrease petroleum levy to save economy from harmful consequences of high petroleum prices.
Asghar Ali is of the view that the entire industrial sector is already facing multiple internal and external challenges and the recent increase would further aggravate the economic situation. He said the share of furnace oil in Pakistan's energy mix is around 50 percent and hike in petroleum products would significantly push up production cost making our exportable products uncompetitive in international market. Government should make all-out efforts to accelerate oil exploration in potential areas of the country for achieving self-reliance as currently the country is producing just 15 percent of the total oil consumption and a huge amount is spent on oil import due to which our import bill has already surpassed US $15 billion.
Muhammad Asif said due to high cost of doing business, ratio of sick industries is on the rise and further increase in power tariff will drastically hit the industrial chain. He said as result of current increase, especially exporters would suffer a great loss because of continuous fluctuation in tariffs. Instead of frequently increasing energy tariffs, government should develop strategies to control transmission, distribution and theft losses due to which the country is losing more than 30 percent of electricity. Government should focus on exploiting cheap and alternative energy resources for providing uninterrupted power supply to industry at affordable cost so that industrialists could improve productivity and promote exports, he said.
PTEA urged the government to take immediate steps for tackling energy crisis, reducing high production cost and improving business environment, otherwise export sector will not be able to promote trade for ensuring sustainable development of the economy.
Source:-www.brecorder.com
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