KARACHI: Qurrat Ul Ain, Acting President of FPCCI, while appreciating the federal government’s winter package for electricity consumers, has called for the electricity tariff relief to be extended equally to all sectors, with particular emphasis on small and medium enterprises (SMEs).
“The condition of a Winter Package at 26 rupees per unit for the consumption of 100,000 units during the same period last year, and any additional units used beyond that, should be revoked”, she urged. Winter Package, in its current form, cannot be considered a relief package, she added.
Addressing a press conference here on Wednesday, Ms. Qurrat-Ul-Ain clarified that if this condition remains in place, SMEs and new industries will not be able to meet it; therefore, they will not be able to compete with large industrial units. As a result, the government will not achieve the full results of its Winter Package in industrial production and exports, because the implementation of these conditions will create obstacles in executing the package offered to trade and industry, she added.
Acting FPCCI Chief highlighted that 100 textile units are already closed in Faisalabad due to burgeoning cost of doing business and lack of ease of doing business parameters in the country. The two biggest contributors i.e. electricity and policy rate, are keeping the cost of doing business high in Pakistan as compared to the other regional competitors. Electricity tariffs are much higher than our competitors, while the key policy rate is still at 15 percent, despite a massive declined in inflation, she mentioned.
Ms. Qurrat Ul Ain highlighted that the core inflation clocked at 7.2 percent in October 2024; while, the key policy rate continues to be at 15 percent, representing a premium of 780 basis points (bps). She reiterated FPCCI’s demand to bring interest rate down to single digits; and, it should be done in a single policy decision in the next meeting of the monetary policy committee (MPC) meeting of the SBP. “Given the gradual reduction in inflation, she suggested that the interest rate should be brought down to single digit”, she demanded.
Abdul Mohamin Khan, VP & Regional Chairman, FPCCI, raised the issue of losses booked by electricity distribution companies (DISCOs) year after year; which are expected to be approximately Rs.600 billion in FY25. “We need to plug these slippages and use the buffer for rationalizing electricity tariffs”, he added.
Aman Paracha, VP FPCCI stressed that the government should not entertain K-electric’s efforts to get an increase in electricity tariff through their requisition in NEPRA as the business, industry and trade community of Karachi is already under a lot of stress due to rising costs and shrinking profitability.
Copyright Business Recorder, 2024
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