SIFC clears proposal: APTMA urges govt to expedite power tariff cut process

ISLAMABAD: All Pakistan Textile Mills Association (APTMA) has asked the government to expedite process to slash industrial electricity tariff to cents 9 per unit from cents 14 per unit as the Special Investment Facilitation Council (SIFC) has already cleared the proposal.

According to APTMA, reduction in industrial tariff is an essential structural reform that is crucial for Pakistan to regain competitiveness in international markets by making fundamental corrections to the cost structures of energy intensive sectors.

“Power tariffs of cents 9/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,” APTMA said adding that 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.

The Association argued that the implications of the current tariff regime extend beyond any specific industry or sector, affecting employment, industrial growth, and overall economic stability of the country. Inflated energy costs have forced thousands of firms to scale back production, leading to job losses and reduced economic activity.

APTMA further contended that Pakistan is rapidly de-industrializing, 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.

Over the next 5 years, Pakistan’s gross external financing requirements are projected at over $25 billion annually. A reduction to Cents 9 /kWh is not just about restoring industrial competitiveness it is about reigniting the engine of the economy.

The Association claimed that such a move would bolster exports across sectors and stimulate a range of associated industries and services, leading to job creation, increased foreign exchange earnings, and broader economic stability.

APTMA pledged that it stands ready to work with the government and other stakeholders to ensure the long-term success of the Pakistani economy. “We therefore call upon the government to implement their plan of rectifying power tariffs for industrial consumers with utmost urgency,” the Association stated.

Copyright Business Recorder, 2024