Hike in fuel prices to adversely effect manufacturing sector

Reacting to the government’s fresh move of increasing fuel prices, exporters of textile sector on Monday said the rise would have a negative impact on the country’s ‘ailing’ manufacturing sector.

They said the increase was a ‘blow’ to the country’s already declining exports of textile sector and feared the soaring cost of production and energy crisis would bring the existing manufacturing units to a closure. Talking to Business Recorder on Monday, Chief Coordinator of Pakistan Readymade Garments Manufac-turers and Exporters Association (Prgmea), Ijaz A. Khokhar said the textile industry was unable to bear the fresh fuel price hike.

He said the industry was already faced with many challenges like energy crisis, poor infrastructure and high cost of business, adding the fresh increase would slowdown textile sector manufacturing growth and overall exports during the current fiscal year.

He said the Pakistan’s textile was facing a stiff tariff competition on the world market against its key rivals and getting fresh export orders from foreign buyers had also become a difficult task.

He said the exporters were unable to retain their decades-old foreign buyers only because of uncertain fuel, energy and gas tariffs besides the utilities’ unavailability. “We [exporters] quote prices in advance to grab the future exports orders by at least three to five months,” he said, adding that in between increase in fuel prices badly disturbed the entire manufacturing and shipment plans of exporters.

Khokhar said the recent fuel price hike by the government amount to a “mass murder” of the textile and other manufacturing sectors of the country. “This is not acceptable to us and we will have no other option but to wind up our manufacturing activity,” he warned.

He said that such an unprecedented price increase would not only cripple the industry but would also add financial problems to the public. “When fuel price is increased, it has multiple impacts on our businesses. Raw materials become expensive, cost of labor increases and transportation costs go up,” he pointed out.

He said the industry was not able to bear such a big cost impact on its daily operations, adding that the manufacturers and exporters were already running their units at half scale due to electricity shortages.

Khokhar said “now with recent hike in fuel prices, Pakistan’s textile industry would no longer be viable for our buyers and they may shift their orders elsewhere.”