PAKISTAN: Government mulls subsidies for energy shortages
Pakistan's federal government is considering paying a cash subsidy to textile and leather exporters to compensate for losses incurred during the country's energy shortages.
The domestic textile and leather industries are being hit by energy shortages, especially in the province of Punjab where gas was supplied for just half the days in 2011. This either stopped production or plants were forced to use high cost fuel to continue operating.
Ejaz Khokhar, former chairman of the Pakistan Readymade Garment Exporters Association (PRGMEA), told just-style that the industry has been facing serious liquidity problems and is struggling to repay its short and long term liabilities. He urged the government to introduce a drawback scheme to compensate for higher energy costs
Exports from the country's textile and leather sector fell by more than 20% in November 2011. Pakistan has a target of US$25bn in textile and clothing exports by the year 2015.
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