The recent upsurge in electricity tariffs has created a miserable situation not only for the public but also for the business community wherein many businesses and industrial units fear a shutdown, a statement said on Monday.
Karachi Chamber of Commerce and Industry (KCCI) president Muhammad Idrees and chairman of Businessmen Group (BMG) Zubair Motiwala held a press conference rejecting an “unprecedented” hike in power prices and demanding the government ensure ease of doing business for the business community.
“The government must immediately withdraw hike in electricity tariff, fuel adjustment charges, and reintroduction/increase in fixed charges so that the industries can survive in an extremely competitive environment,” they said.
“The industries are already in deep crises because of the devaluing rupee, inflationary trends, and eroding the buying power of a common man whose electricity bills have also been raised higher by at least three times”, Idrees said, adding that neither any industry nor shops or the public would be able to bear the burden in present circumstances.
He was of the view that many industries would not be able to buckle with inflating the cost of electricity. He termed the rise in power prices unbearable for any industry. BMG chairman stated that the base tariff was raised by Rs9.8972 per unit, which jacked up per unit cost from Rs19 to around Rs30 per unit, indicating a hike up to 50 percent.
“This is not the end of the story as this increased electricity base tariff of Rs30 per unit will obviously be subjected to 17 percent sales tax, excise duty, and income tax as well. When all these components are combined, an unbearable minimum impact in between 65 percent to 80 percent, would appear in the electricity bills”, he noted.
If electricity tariffs continued to go up at the same pace, per unit tariff might reach somewhere between Rs55 to Rs65 in the next couple of months, Motiwala added. He informed that variant tariffs had 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.
“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 reengage labor for resumption of pending work during the remaining non-peak hours.”
Motiwala urged PM Shehbaz Sharif to look into National Electric Power Regulatory Authority (NEPRA), saying, “many decisions taken by NEPRA are purely against the consumers and in recent history.”
He was of the opinion that NEPRA rules should be redefined and a consumer representative is included in its penal for public hearings. BMG chairman claimed that industries of Karachi were paying at least Rs10 more than what was being charged from industries in Peshawar.
Expressing concerns over restoration and increase in fixed charges, Motiwala termed it as unacceptable, saying it would further increase the cost of doing business as fixed charges were applicable as per load on operational and inoperative industries that, instead of being encouraged to reactivate operations, would be compelled to stay closed, he feared. “It’s an imprudent move and it’s neither in favor of businesses nor the economy as it would refrain industrialists from reactivating their closed units.” The government must withdraw fixed charges to encourage industrialization and ensure the creation of maximum employment opportunities, he urged.