KARACHI: The business community has strongly criticized the substantial increase of Rs4.95 per unit in the “uniform national tariff,”. It will raise the cost of doing business, hamper local production, and make Pakistani goods uncompetitive in global markets.
Trade and industry leaders believe that this tariff increase is one of the conditions imposed by the IMF.
Nepra announced the FY24 national average tariff revision to Rs29.78 per kWh, an increase from Rs24.82 per kWh.
According to Ehsan Malik, CEO of the Pakistan Business Council, the industry already faces significantly higher power tariffs compared to the region, making exports uncompetitive. High energy costs also hinder the growth of energy-intensive sectors and contribute to the country’s reliance on imports.
He added that the fundamental challenges in managing the circular debt include excess generation capacity, transmission and distribution losses, theft, and non-recovery of dues. Instead of increasing tariffs, the government should provide direct subsidies through programs like the Benazir Income Support Programme.
Malik emphasized that the latest tariff hikes would erode industry competitiveness, incentivize theft, and not address energy sector problems. He urged for a focus on curing the root causes rather than managing the symptoms.
Riazuddin, President of the Site Association of Industry, criticized the increase in electricity tariffs despite low global energy prices. He argued that the tariff rise, combined with lost competitiveness, is causing local industries to shut down.
Faraz ur Rahman, President of the Korangi Association of Trade and Industry (Kati), emphasized that the electricity tariff increase would substantially increase production costs for electricity-dependent industries. This, in turn, would affect their competitiveness, potentially leading to a decline in exports and overall economic growth. He noted that higher tariffs would cause inflation, impacting consumers, especially those with limited incomes, in a negative way.
