ISLAMABAD: Pakistan Association of Large Steel Producers (PALSP) Wednesday urged upon the Senate Standing Committee on Finance and Revenue that any reduction in tariffs should be linked to a corresponding reduction in power tariffs.
Without this linkage, the proposed tariff reductions will only exacerbate the industry’s struggles, potentially leading to closure and significant economic losses.
A delegation of PALSP comprising Abbas Akberali, Syed Wajid I Bukhari and Javaid Iqbal gave presentations to the committee, chaired by Saleem Mandviwalla and recommended that tariff reforms should be linked with power tariff reduction.
They stated that steel is regarded as the backbone of economy world-wide. However, knowingly or unknowingly, the government is pushing this critical industry towards closure. Bangladesh, with similar economy as ours, provides protection of 98.92 per cent to its steel industry. Pakistan provides half of this protection. Through budgetary measures, government is all set to further expose steel industry to the flood of imports/ vulnerabilities, they added.
Regarding the negative impact of tariffs reduction, they said that the proposed drastic reduction in customs tariffs will have a devastating impact on the steel industry. Unlike other industries, the steel sector has a unique situation. The value addition of cost of power is above 70per cent of the total cost, making power tariffs a critical component of its production cost. “Our power tariff cost is the highest in the region, already putting us at a competitive disadvantage,” they said, recommending that any reduction in tariffs should be linked to a corresponding reduction in power tariffs.
They said that this will ensure that the industry remains competitive and sustainable. Without this linkage, the proposed tariff reductions will only exacerbate the industry’s struggles, potentially leading to closure and significant economic losses.
The steel industry consumes power load to the tune of 4000 MW, creates millions of jobs, directly and indirectly. Once steel industry is closed, the surplus power will add to the pool of capacity payments, they added.
Regarding turn-over tax, they said that in this budget, the government reduced the adjustment period of turn over tax from three to two years. “We urge the government to increase the adjustment period to five years.”
Copyright Business Recorder, 2025
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