ICCI shows concerns over hike in gas tariff for power sector

  • May 02, 2016
Islamabad Chamber of Commerce and Industry has shown concerns over more than 2 percent hike in gas tariff for power sector taking new gas tariff for power sector to Rs.613 per million British thermal units (mmBtu) and called upon the government to reconsider this decision as it would further push up the cost of doing business in the country and make our exports more uncompetitive in the international market. 
 
Sheikh Pervez Ahmed, Acting President, Islamabad Chamber of Commerce and Industry lauded the government move to reduce gas tariff for fertilizer plants by Rs.76.59 mmBtu as it would provide good relief to the farmers and help in improving agricultural productivity. However, he said relief to fertilizer sector at the cost of power sector was not a wise move as increase in power tariffs would multiply problems for business and industry and put additional burden on the common man in the form of rising inflation.
 
He said per unit cost of electricity in Pakistan was reportedly 14 cents while it was 9 cents in India, 8.5 cents in China and 7.3 cents in Bangladesh which showed that power tariffs were already highest in Pakistan due to which our exports were struggling. He said Pakistan’s total exports during first half of 2015-16 (July-December) witnessed a decline of 14.4 percent to $10.322 billion against $12.058 billion in the same period of last year and further hike in power tariffs for gas-based power plants would make our exports more uncompetitive. 
 
Sheikh Pervez Ahmed said that electricity was a key input for industry and any increase in its cost would translate into high production cost, high prices for consumers, slump in business activities & exports, low revenue generation and an overall negative impact on the economy. He stressed that government should reconsider this increase and focus on power generation through cheap sources like water, coal and renewable energy sources which were plenty in the country. He said bringing power tariffs down would bring multiple benefits to the economy as it would give boost to business activities, promote industrialization, create new jobs, enhance exports, generate more tax revenue and strengthen the overall economy.