The Pakistan Business Council (PBC), the country’s largest corporate sector advocacy platform, has urged the government authorities to lower power tariffs.

“Higher power tariffs discourage consumption by honest consumers and create a higher incentive for theft by others,” the PBC said on social media platform X on Thursday. “Net result is more unutilized generation capacity, higher capacity charges and further pressure on circular debt,” it said.

The council was of the view that lowering tariffs would ‘reverse’ these factors.

“With substantial unutilized generation capacity, marginally priced power for productive sectors of the economy, such as industry, leads to higher employment and economic activity, which also generate tax revenue and exports,” it said.

The PBC urged the authorities to lower tariffs for domestic users in winter months on an immediate basis. “Incentivize switch away from gas for heating and cooking.”

“None of this is rocket science. So why the inertia?”

Back in October, the PBC floated proposals to slash electricity tariff up to Rs6.5 per unit through different measures including renegotiation on tenor of debts of CPEC IPPs.

PBC, in its proposal, explained that Pakistan suffers from the highest electricity costs in the region. The competitiveness of the industry and its capacity to create employment and generate exports is impeded by the burden of unutilised generation capacity, inefficiencies in transmission, theft, non-recovery and cross-subsidies to residential consumers.

Businesses in Pakistan have frequently voiced their concerns over rising energy rates, as they believe that the high power tariff would leave the local industries uncompetitive.

Last week, the All Pakistan Textile Mills Association (APTMA) demanded that the government bring power tariffs down to a regionally competitive level of 9-10 cents/kWh where Pakistan’s exports are competitive in international markets.

The association urged caretaker Federal Minister for Energy Muhammad Ali to expedite the reform process considering the gravity of the situation.