The All Pakistan Textile Mills Association (APTMA), which represents the largest industrial sector of Pakistan, has appealed for the urgent removal of the cross-subsidy from power tariffs for industrial consumers, bringing them down to 9 cents/kWh.
In a statement on Monday, APTMA said the implementation of 9 cents/kWh power tariffs for industrial consumers is an essential structural reform, crucial for Pakistan to regain its competitiveness in international markets.
“Power tariffs of 9 cents/kWh will not only reverse the declining power consumption of industrial consumers but also increase power consumption such that any power sector revenue losses from a price reduction will be more than offset by a positive volumetric effect,” read the statement.
“Moreover, it will help control the build-up of circular debt that continues to grow despite a significant increase in energy prices over the past year,” it said.
Regionally competitive level sought: APTMA demands power tariff at 9-10 cents per kWh
APTMA shared that inflated energy costs have forced thousands of firms to scale back production, leading to job losses and reduced economic activity.
It warned that Pakistan is rapidly deindustrialising, as evidenced by the decline in power generation and consumption over the last few months, especially that of large industrial consumers. “The country is stuck in a vicious cycle of increasing power tariffs causing consumption to decline, which again causes power tariffs to increase, and so on,” APTMA noted.
APTMA said over the next 5 years, Pakistan’s gross external financing requirements are projected at over $25 billion annually.
“The only way to meet this financing gap is by either falling further into the debt trap or by increasing our exports,” it said.
APTMA said that the tariff reduction to 9 cents/kWh would help bolster exports across sectors and stimulate a range of associated industries and services.
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“The global economy is fiercely competitive, and to thrive, Pakistan must offer an environment conducive to business growth. Rationalized energy costs are a critical component of this environment,” the body said.
“We therefore call upon the government to implement their plan of rectifying power tariffs for industrial consumers with utmost urgency,” said APTMA.
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