ISLAMABAD : All Pakistan Textile Mills Association (APTMA) has sought Prime Minister’s support for supply of gas at full RLNG cost with inclusion of cross subsidies or levies and permission textile sector to directly import its own LNG.
In a letter to Prime Minister, Shehbaz Sharif, Chairman APTMA, Kamran Arshad has said that over the past two years, gas price for captive has increased from Rs. 1,100/MMBtu to Rs. 3,500/MMBtu. Now, an additional levy of Rs. 791/MMBtu has been imposed, taking it to Rs. 4,291/MMBtu ($15.38).
He is of the view that the industry cannot compete at this rate. Competitors in India, Bangladesh and China access gas at $6-9/MMBtu. Over $18 billion in exports are at risk.
According to APTMA, the entire process is marred with inconsistencies and errors: (i) the 2021 Cabinet Committee on Energy (CCoE) decision has been misrepresented to justify across the board elimination of captive. It allows for combined heat and power plants that are extremely efficient, internationally standard, and essential for meeting climate taxes and targets, to continue ;(ii) at Rs. 3,500/MMBtu, the cost of captive generation is between 14-18 cents/kWh, while grid tariffs are 12 cents/kWh. There is no need for a levy ; and (iii) despite this, a levy of Rs. 791/MMBtu has been incorrectly calculated. Even according to the Ordinance, the levy comes to negative Rs. 556. 31/MMBtu.
” If the textile sector is to survive and thrive, its energy requirements must be met. The grid is not well-positioned to serve the full industrial energy demand. Captive power generation, particularly cogeneration, is essential,” he said adding that the industry seeks no subsidies, only the following market-driven measures: (i) supply gas at full RLNG cost, with no cross subsidies or levies.;(ii) conduct transparent competitive bidding of 35% domestic gas discoveries under 3rd Party Access ; and (iii) permit the textile sector to directly import its own LNG.
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