KARACHI, JULY 27 – The Federation of Pakistan Chambers of Commerce and Industry on Monday asked the government to bring down electricity tariff to the competitive level of regional countries on permanent basis, as NEPRA’s accumulated cut of Rs3.09 per unit just for three months under a monthly fuel adjustment formula is not an enduring solution to ease industrial cost of production.
FPCCI President Mian Anjum Nisar said that Pakistan exports cannot compete with China, Bangladesh and India where power tariffs were 7-9 cents, particularly in the post-corona economic slowdown as the country’s exports have been witnessing a major setback in present days due to high cost of electricity, which has become a major stumbling block in industrial development and boosting exports..
“FPCCI welcomes the National Electric Power Regulatory Authority (NEPRA) to provide accumulated relief of Rs 4.46 billion to the power consumers as it has decided power tariff for eight months of Nov 2019 to June 2020 for power distribution companies (DISCOs) under the formula of monthly fuel charges adjustment, but this is not a permanent solution,” he stated.
Mian Anjum Nisar pointed out that NEPRA has also decided to increase in electricity rates for five months of Nov, Dec, Jan, Feb and March with accumulated impact of Rs 4.86 per unit, putting an additional burden of billions of rupees on industrial consumers.
He said that electricity is regarded as the lifeline of any economy and plays a pivotal role in socio-economic development of a country. The demand for electricity has been rising consistently mainly due to growing industrial requirement and population explosion but unfortunately, power generation and supply have not been able to meet this rising demand of electricity.
FPCCI President said that the cost of electricity generation is also high due to faulty fuel mix which has led to massive loadshedding and power shortages in Pakistan.
He stressed the need to resolve the circular debt issue by revamping the entire power sector, including tariff setting, efficiencies of power generating units, supply chain network and payment recoveries. If this is not done, the future of energy sector would remain at stake, he warned.
Mian Anjum Nisar said that industries need low cost energy to bring down their cost of production, keeping their goods competitive in the international market. He said that cut in energy prices would be a great relief to the exporters as well as the local industry which have been suffering heavily because of post-corona slowdown.
He urged the power ministry to identify system constraints, communicate targets to all the concerned departments to initiate up-gradation of transmission system on war footing.
In this post-corona era, the best solution to overcome economic challenges is to promote industrial activities by slashing energy cost to revive the economic growth and sustain employment in the country, he said.
Mian Anjum Nisar said that production of hydel power has been increased while furnace oil price is constantly declining in the international markets. The authority, therefore, should not restrict the relief to few months only rather it should make decrease in the power tariff on permanent basis, he added.
He said that business-friendly policies must be adopted as other neighbouring countries of the region are giving to trade and industry. The amount specified in trade policy should be utilised for the promotion of exports by giving incentives to the trade and industry and by exploring new markets, he suggested.
He raised the questions on excessive electricity bills, as the government is using expensive fuel for power generation instead of cheaper energy source. He pointed out why furnace oil based power plants were operated in months of Dec and Jan when the power generation though hydel source was possible? He said cheap electricity can bring multiple benefits to the economy as it will reduce cost of doing business, making our products competitive in the global market with ultimate benefit of increasing exports and reviving economic growth.
He said the government has always reiterated its resolve to provide uninterrupted electricity to export sector to earn valuable foreign exchange for the country. He stressed the need for a continuous supply of electricity without any fluctuation at competitive rates at this critical junction, when the exports of the country are constantly down due to COVID-19.
He said that high cost of doing business was one of the major issues being faced by the industrial sector and industries need support of the government to bring down their input cost for competing international market.