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Hike in gas prices may lead to closure of textile units
08
Jul '08
The hike in gas rates for captive power plants has not been welcomed by leading textile associations of Pakistan, they have warned of pulling the shutters down. This was a joint decision taken in a meeting held at All Pakistan Textile Mills Association (APTMA) house, by the Representatives of various associations.

In an exclusive interview with Fibre2fashion, Mr Adil Mehmood, Chairman, All Pakistan Textile Association (APTA) divulged, “Association members held two meeting one on July 3 in Lahore and second on July 4 in Faisalabad, for deciding steps they need to take against Government.”

The entire textile industry has called this decision imprudent, as presently the sector is facing tough times and this rise in price will only add to the troubles. If the authorities do not pay heed to the demand of reducing the gas rates, slowly but surely all the units will close down.

The new prices have come in effect from July 1 and industry insiders are of the opinion that, there is a constant discrimination that the Government is making between various sectors. The rates for captive power of fertilizer factories has been increased by 31 percent against 68 percent shoot up for textile industry.

Experts believe that, if the local mills close down, the import of finished goods will rise, which in turn will have a negative effect on Foreign Exchange Reserve of the country. It will also put pressure on banks and will lead to a series of legal procedures owing to shut downs of textile units.

The textile sector under no circumstances can bear the cross subsidy given to other gas consumers including fertilizer factories and domestic consumers. Thus, if the Government does not bring the prices back that prevailed on June 30, there are chances that many units may go on strike from July 11.

Fibre2fashion News Desk - India

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