KARACHI Suleiman Chawla, Acting President Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has expressed the shock and awe of the entire business, industry and trade community at the unprecedented, one-tranche and massive electricity tariff hike of Rs. 7.91 / kWh; resulting in Rs. 24.82 / kWh base tariff for the year 2022 – 23, while it was Rs. 16.91 / kWh for the outgoing year 2021–22.

It is a rate hike of a staggering 47 percent by NEPRA; and, it will jolt the cost of doing business and ease of doing business, he added.

Suleman Chawla explained that the cumulative effect of the fuel and power rate increase my unleash a historical economic stagnation; and, will result in a lot of bankruptcies, inevitable defaults on account of electricity bills; many export orders would not be fulfilled, huge loss of employment opportunities and loss of tax revenue will follow.

Acting FPCCI Chief added that inflation has already climbed to 13.8 percent, which is a 30-month high; and, with accounting for the latest developments, it is slated to cross 20 percent in a short span of 4 – 8 weeks.

He apprised that the collective price spirals through combined multiplier effects of fuel and power prices will hit hard the masses through food inflation, who will be further affected by impending unemployment.

Hence, the government should come up with a protective mechanism for SMEs in consultation with the apex chamber; as SMEs are the real engine of growth and employment generation.

Dissecting the main contributing factors in the power tariff hike, he enlisted rising fuel prices, capacity costs & challenges, transmission & dispatch (T&D) losses and rupee devaluation – which all can be dealt with better management and planning.

Copyright Business Recorder, 2022