Muhammad Mudassar

The business community has expressed serious concern over 80% increase in electricity tariffs, which it warned, would increase the production costs, leading to reduced demand for products both locally and internationally.

The Businessmen Group (BMG) and the Karachi Chamber of Commerce of Industry (KCCI) have rejected the unprecedented hike in electricity tariff, stating that unbearable upsurge in electricity costs has created a miserable situation not only for the public but also for the business community.

The businessmen’s bodies have noted with fear that high inputs costs would force many industrial units to close down as it was impossible to absorb such an extraordinary rise in electricity tariffs.

Addressing a press conference recently, BMG Chairman Zubair Motiwala along with KCCI President Muhammad Idrees demanded that keeping in view the gravity of the situation and likely repercussions on the already ailing economy, the government should immediately withdraw a hike in electricity tariff, fuel adjustment charges (FAC) and reintroduction/increase in fixed charges so that the industries could survive in an extremely competitive environment, while the hardships being faced by common man could also be reduced amid runaway inflation.

The BMG chairman stated that it was a matter of grave concern that the base tariff had been raised by Rs9.9 per unit, which has jacked up per unit cost from Rs19 to around Rs30, indicating an unprecedented hike of 50%. “This is not the end of the story as this increased electricity base tariff of Rs30 per unit will obviously be subjected to 17% sales tax, excise duty and income tax as well, and when all these components are combined, an unbearable minimum impact in between 65% to 80% would appear in the electricity bills,” he noted.

If electricity tariffs continued to go up at the same pace, the per unit tariff may reach somewhere in between Rs55 to Rs65 in the next couple of months, he added.

He said the hike in tariff had raised the cost of doing business for industries. Variant tariffs have once again been restored for the industries under the policy of peak and off-peak hours, which was suspended in the past, and a uniform tariff was applicable throughout the day so that the industries could carry on their production at full capacity without any interruption, he added.

Moreover, he said the restoration of peak and off-peak hours is going to create a very difficult situation for the industries as they will either have to curtail their production or suspend operations during peak hours and then re-engage labour for resumption of pending work during the remaining non-peak hours, which happens nowhere around the world but only in Pakistan.

Such mess usually surfaces in the country due to poor decisions and policymaking by the National Electric Power Regulatory Authority, which never listens to consumers and only fully facilitates Discos (distribution companies), he said.

Motiwala demanded that as the entire country suffers badly due to flash floods and the cities, villages, highways and markets are flooded with rainwater, the government should come forward and provide relief to people by deferring payment of electricity bills for a period of at least two months with a view to supporting the affected people during the relief and rehabilitation activities.

He said any industrial, commercial or domestic consumer with an electricity bill of less than Rs2 million must be spared from payment for two months, while the electricity bills of other industries must also be deferred at least for three months so that they reach a point where they are able to settle their outstanding bills.

Additionally, Motiwala said the deferred bills can be charged later in the shape of three equal monthly instalments along with a current bill from the fourth month onwards.

He said the industries were already in deep crisis because of the devaluing rupee, inflationary trends, and erosion of the buying power of common man, whose electricity bills have also been raised higher by at least three times.

Credit : Independent News Pakistan-WealthPk