Amir Khan

Rising electricity tariffs are hampering industrial growth and exports, creating challenges in sustaining current levels.

Talking to WealthPK, Syed Sibt-e-Abbas Zaidi, Joint Secretary of Large Enterprises Development at the Ministry of Industries and Production, said the rising electricity tariffs were adversely affecting both export-oriented and general industries. He recommended "rationalising tariffs to lower production expenses and improve the competitiveness of local products." He said the business community grew increasingly restless due to the inflated electricity bills. He pointed out that high energy tariffs rendered local products less competitive in international markets than those from Bangladesh, India, Indonesia, Vietnam and Egypt. "The rising power tariffs associated with contracts with independent power producers (IPPs) reveal a significant increase in capacity payments, despite no corresponding rise in electricity usage.

This financial strain is being unfairly transferred to consumers who are already struggling with high inflation, turning it into a critical national issue." Talking to WealthPK, Sheikh Khalil Qaiser, Chairman of the Pakistan Yarn Merchants Association, urged the government to re-evaluate IPP contracts. He called for the cancellation of these agreements, citing the detrimental impact of high-power tariffs on the textile and export-oriented industries. "The textile sector is struggling with unsustainable costs due to elevated energy tariffs." Khalil warned that additional capacity charges from IPPs could force many industries to shut down. He also questioned the transparency of payments made to IPPs despite minimal electricity generation, highlighting that the government is obligated to purchase electricity at Rs750 per unit from some IPPs, which raises concerns within the business community.

Khalil stressed the need for lowering electricity and gas rates by renegotiating IPP contracts to ensure continuous industrial activity and economic growth. Talking to WealthPK, Malik Khuda Bakhsh, head of the Federation of Pakistan Chambers of Commerce and Industry's Energy Committee, criticised the financial strain imposed on the public to support 40 IPPs. He highlighted that 25% of these IPPs were inactive, yet they received Rs10 billion in monthly payments. He emphasised the need for prompt government intervention to guarantee a sustainable and cost-effective energy supply for both industries and the general public, which is crucial for Pakistan's economic stability and growth.

Credit: INP-WealthPk