The most important export industry in Pakistan is textile. And the gas shortage is reflecting directly on that, causing inflation and weakening currency along with it. This is impacting tremendous stress on the overall economy of Pakistan.
The executive director of all Pakistan Textile Mills, Shahid Sattar said, over 250 million dollars of textile exports was lost in the last month after mills in Punjab were forced to shut for 15 days. Factories of that region depend on regasified imports of liquefied natural gas. While the domestic gas supply is diverted to other regions of the country Sattar added.
Pakistan has become a fast-growing import market for Liquefied Natural Gas as a local source supply has subsided over the last few years. But the completion for the fuel used as electricity feedstock and for heating and cooking supplies. And the condition has intensified due to the global shortage of LNG. Keeping the spot prices to a level that Pakistan is unable to afford.
The textile industries are the brightest spots in the country. From hat to denim Pakistan has a worldwide market for it. Since March 2021 production grew 6 percent in these nine months. The government data showed that this industry has accounted for over 60 percent of total exports.
The executive director of all Pakistan Textile Mills, Sattar said in an interview, ‘The high gas prices are prohibitive’. He added more ‘supply shortfall is due to the energy ministry’s inability to arrange supply and is hurting the very future of Pakistan’s exports and economy.’
The data shows that Pakistan exports over 11.4 billion dollars of textile in the nine months since March 2021. Based on the numbers shared by Bloomberg calculations, the 250 million dollars probably amounted to 20 percent of Pakistan’s textile exports last month, according to last month.
The government also needs to raise taxes and has to increase petrol prices, as a precondition to resuming its 6 billion dollars bailout program with the International Monetary Fund.
The officials of the Energy ministry didn’t respond to the phone calls seeking answers to these recent situations.
In the coldest months of the year, Pakistan issued an emergency tender to import more LNG in November after the domestic supplies back out from deliveries during skyrocketing prices and a drastic rise in global demand. Gas Tender Governor told Pakistan they would be unable to deliver scheduled for 10th January.
Energy Minister Hammad Azhar said in the press briefing held in late December said, the country faces a gas shortage every winter because the natural gas felids are decreasing about 9 percent each year. And the imported LNG prices are very expensive. Pakistan announced a bidding round to help find more oil and gas reserves, Azhar posted on Twitter last Friday.
But the government restored gas supplies to the textile industries last Wednesday. And the mills will be able to function at about 80 percent capacity in this present situation. The problem of frequent blackouts is still not completely resolved yet.