Industries: 25pc cut on additional electricity bill a good omen: EFP President

KARACHI: Ismail Suttar, President Employers’ Federation of Pakistan (EFP), while citing the recent 25pc electricity tariff subsidy on additional billing and uniform revoking of peak hour rates by the government for all industries is a step in the right and will help boost morale of manufacturers.

In a statement, EFP president said the recent offer for tariff cut up and above the normal usage, shows a positive way forward. However, it is important to note that the cost of electricity in Pakistan is the highest in the region largely due to our various commitments to the power sector that has severely hampered industrial growth.

“Regionally, the average tariff rate is Rs.12 but in Pakistan the per unit charge is beyond Rs 19 plus GST. There is hope that with this positive development the high cost of electricity will also be brought down within 3 years so that regional buying patterns shift from India, Vietnam and Bangladesh to Pakistan,” Ismail explained.

EFP Chief also remarked that the public is not aware the national grid gets unwanted surplus power of 18,000 MW that is not being used at all due to backward transmission and distribution infrastructure. A good 75 percent is supplied by Independent Power Producers (IPPs) and the government has to pay for this additional capacity through more public loans that ultimately add to the tariff collection of Nepra from industries.

Hence, the recent break with IPPs on repayment in rupees instead of in dollars will reinforce the recent subsidy.—PR

Copyright Business Recorder, 2020