Karachi, July 26, 2023 – The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has issued a stern warning to the government, raising concerns over the recently implemented massive hike in electricity tariff.
The apex trade body fears that if the government does not reconsider its decision, it could lead to a complete halt of business activities in the country.
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Irfan Iqbal Sheikh, President of FPCCI, spoke on behalf of the business, industry, and trade community, expressing strong opposition to the latest PKR. 7.5 / kWh increase in electricity tariff, deeming it detrimental to the business environment. He emphasized that Pakistan’s competitiveness is already suffering in comparison to regional and sub-regional countries due to the unfavorable cost of doing business in the country. Absorbing the additional burden of this tariff hike would be impossible for businesses, leading to dire consequences.
Sheikh pointed out that businesses were already burdened with high electricity costs, paying close to PKR. 60 / kWh when factoring in all billing components such as base tariff, surcharges, taxes, and other charges. The significant hike in electricity tariff will exacerbate the situation, potentially crippling business, industrial, and commercial activities.
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Rather than placing the burden on regular consumers, Sheikh stressed that the government should prioritize curbing electricity theft and controlling line losses. By addressing these issues, leakages from the system can be plugged, and additional revenue can be generated for the government.
As the President of FPCCI, Sheikh acknowledged the mounting pressure from the 250 trade bodies, associations, chambers, and sectors to negotiate with the government on their behalf and request the withdrawal of the tariff hike. He remains hopeful that reason will prevail, and the government will reconsider its decision.
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Sheikh highlighted the ripple effect of high electricity costs, leading to increased expenses at every stage of production, ultimately affecting end-consumers. He questioned why the government has not been able to present its case for adequate aid, especially considering recent IMF admissions about insufficient aid during devastating floods in the country.
The President of FPCCI emphasized that the business community is an essential contributor to the country’s economy and growth, generating taxes, employment, and stability. However, continuous implementation of untimely, regressive, and anti-business measures has left them feeling mistreated and frustrated.
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Sheikh urged the Prime Minister and Finance Minister to recognize the brewing frustration within the business community, which could result in defaults on electricity bills, impending bankruptcies, and the inability to fulfill export orders. He called for an urgent and meaningful consultative process with the business community to address their concerns and find viable solutions.
The FPCCI’s warning comes as a plea for the government to reconsider its stance on the electricity tariff hike and engage in constructive dialogue with the business community to support economic growth and sustainability in Pakistan.
