Karachi industries fear another power hike may be the final straw

May 23, 2024

Ahmed Khan Malik

The Karachi-based industrialists fear the devastating impact of a further hike in the electricity tariff on the industries under the dictation of the International Monetary Fund (IMF) and demand that the government subsidize power, allowing them to grow unhindered. They hail the recent cut in the prices of petroleum products and demand that the power rates be reduced on the same pattern. Talking to WealthPK, Faraz al Rahman, Chairman of Pakistan Business Group, said the survival of industries in Pakistan was at stake. "Yes, it has become inevitable to provide electricity to the industries at 0.9 cents per kWh," he added. "The government is taking good steps. The SIFC is a good initiative, but the industries, especially the cottage industry, are facing a grim situation, and the latter will cease to exist in near future. "Owing to corruption, the rich are getting richer by the day, while the poor are getting poorer. The country's economy is also getting weaker. Now is the time to rectify the situation; otherwise, it would be impossible to run the country," Faraz said.

He said it's the need of the hour that people from all sectors, including the government and opposition parties, join their forces to get the country out of trouble. He emphasized immediate measures like reducing the energy rates for industries, formulating long-term policies and widening the tax net to start the process of economic recovery. Faraz suggested that the government negotiate a better deal with the IMF for the next loan program so as to save the consumers, especially the industries, from a further hike in the power tariff, which would cripple the industries. Raziuddin Babar, Senior Executive Member of Port Qasim Industrial Association, welcomed the reduction in petrol and diesel prices by up to Rs15 per liter and requested the government also to reduce the electricity and gas tariffs and take the industries and economy out of the prevailing crises. He noted that it was a good move of the government to reduce the POL prices in the wake of a reduction in the international market.

"The reduction in gas and power tariff will help lower inflation, bringing relief to the common masses to some extent. However, to provide relief to the lower class, an effective price control mechanism is required to provide goods of necessity at the government-fixed prices." He added that the production cost of industries was increasing day by day due to an increase in the power and gas tariff, which made it very difficult for industries to run. "The government can provide an industry-friendly atmosphere by giving relief to the industries and playing its role in promoting the economic activities in the country. Economic progress is directly linked to industrial progress. As such, running the wheels of industry will bring prosperity in the country, together with job creation and export promotion," he said.

Credit: INP-WealthPk