KARACHI: Business community and people from various walks of life have rejected increase in the electricity tariff and termed it an anti-business and anti-general public move, which would adversely impact the already crippled trade, industry and make general public life measurable.
They said that the businesses were still struggling hard to recover from the disaster caused by the six-month long lockdown imposed to contain Covid-19 pandemic. They said the hike in power tariff may jack up prices of almost all other products and commodities. “Prime Minister Imran Khan, while in the opposition, had called the then rulers robbers and looters for raising power tariff or petrol prices. By that logic, we believe that the current rulers are also plunderers since they have hiked the power tariff.
Mian Nasser Hyatt Maggo, President of Federation of Pakistan Chambers of Commerce and Industry shows concern over electricity tariff hike and disconnection of gas for the industry. He said that instead of reforming the energy sector, the ad-hoc and painful decisions are being made detriment to domestic industry. He said that the much awaited outcome of negotiations between IPPs and government which was considered to be directed towards reduction in base tariff do not assures any decrease in the base tariff, which again is shocking outcome questionable as the private sector was of the view that the report published on IPPs which was required to be further expanded towards the eventual objectives of resulting in the reduced cost of energy for increasing the competitiveness of economy and mitigating the inflationary trapped and consumption requirement of the poor segment of the economy.
He said that the spokesman on the energy has attributed the need of tariff hike due to bad and corrupt agreements made with IPPs in the past. He said that if so, such situation requires to be corrected through invoking all the civil and criminal remedies to correct the agreements by excluding the pay or take, reducing O&M cost, converting the repatriation cost from dollar indexation to rupee and relevant recommended measures in the report. He said that while appreciating the present government in ordering the inquiry in respect of agreement with IPPs, the outcome does not appear to be reciprocating for base tariff reduction and availability of electricity sale at reduced cost.
He further said that the announcement of Rs. 40 billion per year off-take of financial burden on Government is marginal even against the present announced tariff base hike wherein one rupee hike is over charging consumers of Rs. 100 billion on consumption of electricity.
President FPCCI also said that such on & off increase in tariff is coming in the way of economic development, in specific loaded by the carried forward adverse effect of COVID-19. The hike if is linked to any part of the memorandum of understanding with IMF can be fairly convinced for freezing such tariff hike when IMF itself projected low economic growth. Such duplicity cannot be justified. On the other side the predictable outward and inward oriented trade has become hostage of keep on increasing gas prices and intending to disconnect the gas supply of captive power plants.
He said that mismanaged RLNG cargoes by the Petroleum Division are also answerable to such abrupt and non-justified late decisions. He said that during last November the spokesman on energy and petroleum had promised that increasing demand of gas in the winter season will be met through increase in RLNG imports. It appears that this non-living promise has forced Government to take decision of disconnecting the gas for captive power of industry. The setting of the deadline for disconnection of gas from February 1, 2021and 1st March 2021 is too short time to adjust.
He said that some industry is running on captive powers with some emergency required grid loads need more time to arrange all the equipment’s and settle all the requirements of Discos which would take considerable time. He said that even CPP’s of industry with equivalent power arrangement from Grid also requires back-up adjustments of power by the Discos which is again time- consuming.
Mian Nasser Hyatt Maggo, President FPCCI proposed that the time period provided be extended reasonably in order to shift to Grid power. He said that the penalty of bad agreements with IPPs on capacity and take or pay clauses is being shifted to industry with their self-generation through captive power plants which basically is assurance for reliability and un-interrupted supply. Discos have yet to claim such performance to supply un-interrupted electricity without load shedding.
He said that government spokesman has claimed saving of 150 MMCFD gas by disconnecting CPPs of industry, while the gas leakages in the systems are four times of this saving of 150 MMCD. He wondered that if there is any efficiency in the management over sighting the political economy of the gas affairs. He further suggested that even if the government reduces gas loss by one-fourth, the abrupt imposition of such decision may not have been required to adversely affect the industrial economy.
Chairman of National Business Group and President Pakistan Businessmen and Intellectuals Forum Mian Zahid Hussain said a fifteen percent hike in power tariff will burden masses by over 200 billion rupees. The decision should be reversed as it will hit economic activities and erode the confidence of the investors, he said.
Mian Zahid Hussain said that the government should not have increased power tariff to revive the power sector but tried to reduce losses, theft and improve recoveries. He said that masses and economy cannot afford the recent hike in power tariff as it will increase inflation by two percent and hit agricultural and industrial production. The decision will budget masses by over two hundred billion rupees while they will have to brave additional burden of general sales tax and fuel adjustment etc. Those poor who were consuming up to 50 units per months and paying bill amounting to Rs100 will now pay Rs197.50 while those consuming up to 100 units will pay Rs. 774 instead of Rs. 579, he said. The consumers consuming from 101 unite to 200 units will pay Rs. 2012 up from Rs. 1622 and those using 300 units will face an increase in their bills by almost Rs. 600.
The masses which are facing unemployment and unprecedented hike in the price of food and other items will be pushed to the wall by the recent increase in power tariff he said, adding that business community was hoping a cut in the price of electricity due to negotiations with IPPs and record circular debt but their hopes have been dashed.
Copyright Business Recorder, 2021
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