Gas shortages affect Pakistan’s exports, adding to the economic crisis | Business and Economic Affairs

About $ 250m of export fabric was lost last month after a mill in Punjab was closed for 15 days due to a lack of oil.

Pakistan’s oil shortages are hurting its most important export business, and are putting a strain on the economy, which is already struggling with rising inflation and inflation.

About $ 250 million worth of exports were lost last month after a mill in Punjab was forced to close for 15 days, said Shahid Sattar, head of the All Pakistan Textile Mills Association. Factories in the region rely on recycling of natural gas, while domestic resources are exported, he said.

Pakistan has become a fast-growing LNG market because its availability has declined in the last few years. But oil competition – which is used as an electric food as well as heating and cooking – has grown due to global shortages, exporting prices that Pakistan cannot afford.

The textile industry – which offers everything from denim jeans to hats to consumers in the US and Europe – is one of the few economically viable destinations in the country. Production grew by about 6% in the nine months to March 2021 and the sector accounted for 60% of all exports, government demonstrations.

“Most gas prices are prohibited,” Sattar told an interview. “The material deficit was due to the failure of the Ministry of Energy to improve production, and it was detrimental to the future of Pakistan’s exports and economy.”

The country exported $ 11.4 billion in the nine months to March 2021, according to the government. Based on those figures, $ 250 million was probably about 20% of Pakistan’s exports last month, according to Bloomberg estimates.

Gas shortages hit Pakistan’s economic and political crisis. The country is struggling with rising inflation and inflation, with the help of Prime Minister Imran Khan’s ruling party ahead of the 2023 elections.

Officials at the Ministry of Energy did not respond to calls.

Pakistan, which goes into the coldest months of the year, offered emergency interest to import more LNG in November after retailers stopped shipping due to rising prices and global demand. Recently, a gas dealer Gunvor told Pakistan that it would not be able to ship its plans on January 10.

The country faces a shortage of gas every winter because Pakistan’s gas production is experiencing a decline of almost 9% each year and imported LNG is very expensive, Energy Minister Hammad Azhar said at a press conference in late December. Pakistan has announced a call for it to help secure more oil and gas reserves, Azhar said in a Twitter post on Friday.

The government restored gas supplies to the clothing sector last Wednesday, but frequent power outages are still slowing down operations, Sattar said. Mills will be able to move about 80% if things continue, he said.

“Our history is full of incidents of ‘stop-going’ growth due to power shortages and inflation, all of which are the result of poor governance,” Sattar said.