An economic disaster in the making due to absence of uniform power tariffs

  • January 20, 2014
In a Joint Statement issued by the Chambers of Commerce and Industry of the major cities of Lahore, Faisalabad, Islamabad & Rawalpindi as well as the All Pakistan Textile Mills Association, they have unanimously called for a uniform rate of electricity across the country to provide a level playing field and to ensure that no unfair and undue advantage is provided to any specific area or industry.
They said that the power tariff was raised by up to 62-74 percent from August 1, 2013 for industrial, commercial and bulk consumers, however, it was unfortunate that this increase has not been implemented in KP giving it undue advantage at the cost of rest of the country. They further explained that consumers of the entire country had been paying their share of fuel price adjustment (FPA) for the past 5 years. However, some industrialists of KP, using the judicial system, got stay orders against power tariff increase as well as the levy of FPA in KP. This situation has put the industry of the rest of the country at a serious disadvantage.
They said this discrepancy was creating restlessness among the industry in the rest of the country as it is unable to cope with unfair reduced cost of production by the manufacturers in KP. Giving an example, they said on average the difference of the electricity cost on a steel industry can be up to Rs.140 million annually. Such a huge difference cannot be accounted for nor justified under any circumstances.
They said due to such discriminatory rates in the country, many industries in regions of higher tariff had already been forced to shut down, and they feared if this trend continues, the effects will be devastating. The region had already lost thousands of jobs due the closure of plants, and hundreds of thousands more are facing threat of losing jobs and becoming unemployed which may result in another serious economic challenge for the country.
They said the Supreme Court of Pakistan had directed the concerned court to decide the matter by December 17, 2013, but the notification of the decision is being delayed, which is proving harmful for the industry of the rest of the country. They are of the opinion that “justice delayed is justice denied”.
This difference in power rates has already resulted in losses to the tune of Rs. 48 billion to the Peshawar Electric Supply Company, which is already suffering from huge line losses. These billions will lead to increase in the already dire situation of the circular debt problem and in turn will result in increased load shedding. The entire point of the rate increase was to take away the subsidy from the electricity, which was causing a huge loss to the economy. However, maintaining discriminatory power rates in different areas is a complete contradiction to that policy.
They appealed to the Chief Justice of Pakistan to look into this matter of national importance and issue orders for ending the discriminatory policy of giving unfair advantage in power tariff to a specific area at the cost of the rest of the country and for ensuring fair treatment to all areas by imposing a fair and uniform power tariff throughout the country.