APTMA Seeks Competitive Electricity Rates For Increasing Textile Industry Exports

The All Pakistan Textile Mills Association (APTMA) has reached out to caretaker Finance Minister Dr. Shamshad Akhtar, requesting electricity availability at wheeling charges of 1-1.4 cents/kWh and B2B contracts. APTMA acknowledged a Business Recorder report on the formation of a special panel, headed by the Finance Minister, to deliberate on the issue of Use of System Charges (UoSC)/wheeling charges for B2B power contracts. In a letter, APTMA appreciated the development of an independent assessment of UoSC/Wheeling Charges and highlighted the export sector’s prolonged struggle for rational wheeling charges for B2B power contracts. Given the current economic situation, APTMA emphasized the need for a sustained increase in exports across all sectors, particularly in the face of challenges posed by uncompetitive power tariffs and emerging regulations on green energy in key export destinations. The association argued that B2B power contracts under the Competitive Trading Bilateral Contracts Market (CTBCM) with a wheeling charge of 1-1.5 cents/kWh are crucial for the recovery and sustained growth of the textiles and apparel export industry. A proposed wheeling charge of around 9.6 cents/kWh by CPPA-G/Discos has been deemed unrealistic and absurd, significantly higher than those in regional economies like Bangladesh, India, and Vietnam. APTMA highlighted that when the export sector had regionally competitive energy tariffs of 9 cents/kWh during 2020-22, Pakistan’s textiles and apparel exports increased by 54 percent in two years. However, following the withdrawal of these tariffs earlier this year, power tariffs for export-oriented industrial consumers increased from 9 cents/kWh to over 14 cents/kWh, rendering the sector uncompetitive. The Association emphasized that energy costs account for 12-18% of total input costs across the textiles and apparel value chain. With power tariffs increasing, the average firm’s profitability decreases significantly, impacting competitiveness and export volumes. APTMA urged for the facilitation of B2B power contracts to address both immediate challenges and medium-term threats, such as the EU’s C-BAM, emphasizing the importance of affordable energy tariffs for export growth.