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PTEA Laments Increased Power Tariff For Export-Oriented Sectors

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FAISALABAD– The Pakistan Textile Exporters Association (PTEA) has expressed grave concern over imposition of surcharges, taxes and fuel adjustment on power supply to export-oriented sectors as it will negatively hit the export growth shattering all the efforts for sizeable growth in exports.

In a statement here on Friday, Chairman Pakistan Textile Exporters Association Sohail Pasha expressed disappointment over Power Division’s decision terming it anti-export move which if not reversed threatened Pakistan’s exports and would discourage investment in capacity and capability.

This unwarranted action would precipitate a crisis in the textile industry which is delivering on its commitment to enhance exports, he lamented. In January 2019, Government announced an all-inclusive tariff of 7.5 cents per KWh for the zero rated sectors to cut down the production cost of export goods and secure the competitive edge in international market.

Quoting ECC decision, he said that it was clarified that all elements (financial cost surcharge, Neelum-Jhelum Surcharge, taxes, fixed charges, quarterly tariff adjustment and fuel price adjustment) would not be charged to the zero-rated sectors.

This has resulted in substantial quantitative increase in exports; however, barely a year later, Ministry of Energy instructed Discos to charge add-ons and surcharges raising the aggregate cost to 13 cents per unit.

How would exports when subjected to 13 cents/KWh expected to compete with those from India and Bangladesh at 7-9 cents/KWh and China between 7.5-10 cents/KWh and how exporters would pay the difference of tariff arising from the retrospective effect when it was not factored into the price of exports already made, he questioned.

He demanded the Government to fulfill its commitment of regionally competitive energy of 7.5 cents/KWh all-inclusive and withdraw the decision of imposition of surcharges, taxes and fuel adjustment on power supply to export-oriented sectors as it will reverse the growth in exports.

Highlighting another major irritant, Patron-In-Chief of PTEA Khurram Mukhtar has said that with a view to increase the investment and broaden the industrial base, State Bank  had enhanced financing limits for exporters under the subsidized loan schemes including Export Finance Scheme (EFS) and Long Term Finance Facility (LTFF); however, the same has not yet been implemented. Financing limits for exporters under LTFF and EFS have been burst and banks are reluctant to award financing facilities.

This has created immense problems for textile exporters as in absence of finance, they are unable to expand their export turn over.

He demanded the State Bank to direct the commercial banks to ensure the availability of financing limits under Export Finance Scheme and Long Term Financing Facility to exporters in accordance with sanctioned lines.

Similarly, extreme cash flow crunch has squeezed the financial streams as major portion of exporters’ working capital is stuck in custom rebate regime creating severe financial stress.

A huge amount of custom rebate claims is lying pending since long and textile exporters are facing financial issues. He urged the Government to immediately liquidize pending rebate claims enabling the exporters to expand their export volume.— PRESS RELEASE