The trade and industry has warned the government of more protests and demonstrations against the inflated and excessive electricity bills if hike in power tariff is not withdrawn, pointing out the main reason of soaring energy cost is the power purchase agreements signed with the power producers.
Chairman Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Businessmen Panel (BMP) MianAnjumNisar observed that the rising interest rates, the uncertain rupee value, soaring fuel prices, higher gas and power tariffs, and unabated food inflation were extremely serious issues that needed to be addressed by the government on a priority basis. He said that since the arrival of the caretaker government dollar has gone out of control. The new finance minister should call of the real stakeholders to finalize policies, suggesting the institutions which are getting free electricity and petrol should be ended.
The former president FPCCI president stressed that the government should change the basic tariff of IPPs in rupee instead of US dollars as this change would save billions of rupees of the national exchequer and provide electricity at affordable cost to the trade and industry, making our export competitive in the international market. Similarly, the profits of the IPPs should also be paid in local currency instead of US dollars, he said.
He said that they cannot compete with the international market in the current price of electricity, it is impossible to do business in the current conditions and businesses are closing down, the government should focus on alternative sources of energy to provide cheap electricity, create a conducive investment environment for tax collection.
MianAnjumNisar stated that the inflated power bills triggered country-wide protests, including Karachi, Rawalpindi, Multan, Gujranwala, and Peshawar, demanding that the government to abolish imposed taxes on electricity, saying that increase in electricity bills is unbearable and demanded relief from the government.
In July, the then federal cabinet gave its go-ahead to a massive increase in the base tariff of electricity by up to Rs7.50 per unit against the national average tariff determination of Rs4.96 by the power regulator National Electric Power Regulatory Authority.
The regulator had hiked the tariff to increase revenue collection for the loss-making power distribution companies (Discos) during the current fiscal year.
According to a Nepra statement, the revised national average tariff for the 2023-24 fiscal year has been determined at Rs29.78 per unit kWh, which is Rs.4.96 per unit higher than the previously determined national average tariff of Rs24.82.
While the regulator cited the rupee’s devaluation, high inflation and interest rates, the addition of new capacities and overall low sales growth as reasons behind the increase, it was actually hiked to meet one of the conditions set by the International Monetary Fund of introducing structural reforms in the energy sector.
However, the applicable tariff would be much higher after including surcharges, taxes, duties and levies, besides monthly and quarterly adjustments.—INP
