APTMA urges PM to revise gas pricing policy for textile sector

The All Pakistan Textile Mills Association (APTMA) has urged Prime Minister Shehbaz Sharif to ensure a market-driven gas pricing structure for captive power users in the textile sector. The association has requested gas supply at ring-fenced Re-gasified Liquefied Natural Gas (RLNG) rates, free from cross-subsidies, excessive unaccounted-for gas (UFG) costs, and additional levies. 

APTMA has also sought permission for the industry to directly import LNG under the Third-Party Access framework to secure competitive energy rates.

As per news reports, in a letter to the prime minister, APTMA Chairman Kamran Arshad highlighted that gas prices for captive power generation have surged from Rs1,100/MMBtu to Rs3,500/MMBtu in the past two years, with an additional levy of Rs791/MMBtu pushing the total to Rs4,291/MMBtu ($15.38). 

He warned that these rising costs have rendered Pakistan’s textile exports uncompetitive, as industries in India, Bangladesh, and China secure gas at rates between $6 and $9/MMBtu. With over $18 billion in textile exports at stake, APTMA stressed the urgent need for a rational energy pricing framework aligned with global benchmarks.

The association argued that energy pricing should reflect efficiency and market principles rather than being distorted by subsidies and inefficiencies. It proposed that industries using cogeneration facilities undergo third-party audits to verify compliance with efficiency standards. APTMA requested a two-month window to complete these audits and confirm co-generation status.

APTMA further advocated for access to 35% of new domestic gas discoveries through competitive bidding under the Third-Party Access framework to ensure transparency in allocation. It emphasized that the textile sector should be allowed to import LNG independently, noting that current RLNG offers at $9/MMBtu are significantly more competitive than domestic gas pricing. The industry is not seeking subsidies, the letter clarified, but rather a policy that ensures fair and sustainable energy costs.

The letter criticized the misrepresentation of the 2021 Cabinet Committee on Energy (CCoE) decision, which allowed for continued use of combined heat and power plants due to their efficiency and alignment with climate targets. 

APTMA noted that at Rs3,500/MMBtu, captive generation costs range between 14 and 18 cents per kilowatt-hour (kWh), while grid tariffs stand at 12 cents/kWh, making the newly imposed levy unnecessary. Additionally, it claimed that the levy was miscalculated and, according to the Ordinance, should result in a negative Rs556.31/MMBtu.

APTMA warned that the national grid is not equipped to fully meet the textile sector’s energy demand, making captive power generation, particularly co-generation, essential for the industry’s survival. It called for a policy shift that eliminates artificial burdens and ensures gas pricing decisions support industrial competitiveness. 

The association reiterated three key demands: gas supply at full RLNG cost without cross-subsidies or levies, transparent bidding for 35% of domestic gas discoveries, and permission for the textile industry to directly import LNG.