Mansoor Sadiq

Industrialists and traders across the country have expressed concerns over the recent increase in electricity tariffs, warning that they will not be able to fulfil the export orders with such a high cost of production. Vice President of Islamabad Chamber of Commerce and Industry (ICCI) Faad Waheed told WealthPK that electricity rates have increased once again by Rs7.5 per unit, after which the domestic, commercial and industrial units cost an average of Rs50 per unit, which has turned into a burden for the industries as well as for domestic users. Despite strong opposition from consumers, the government increased the national uniform electricity tariff by up to 26% (Rs7.5 per unit) with effect from July 1, 2023 as committed to the International Monetary Fund (IMF) to secure a bailout package.

Faad termed the raised electricity tariff detrimental to industrialists and traders, and emphasised that the government should concentrate on cost-cutting measures on the administrative side instead of burdening the domestic and industrial sector with continuous increase in power tariff. He called upon the government to review the decision of power tariff hike to save consumers from skyrocketing inflation. The ICCI vice president said the government must also focus on generating electricity from alternative cheap resources to lessen the burden on consumers. He said the volume of export orders by industries have significantly dropped owing to increased cost of production. He said such a situation is pushing industrialists to close their industries, which will further add to the increasing unemployment ratio and dent the overall economy of the country.

All-Pakistan Textile Mills Association (APTMA) has also opposed the increase in electricity tariff and asked the government to take measures to address the issue of line losses and other inefficiencies in the power sector rather than further burdening consumers. The circular debt has gone beyond Rs2.56 trillion despite continuous increase in power tariff by the government, which shows the situation remains problematic. The business community is of the view that increased power tariff will drastically reduce their profit margins, and their sales will also decline, resulting in overall decline in business activities. Increased cost of production means increased prices of different products, which will weaken the purchasing power of consumers. Reduced sales will impact the overall business activities in the country and hurt the country’s economy.

Credit: INP-WealthPk