Karachi, October 9, 2023 – The President of the Karachi Chamber of Commerce and Industry (KCCI), Iftikhar Ahmed Sheikh, has welcomed the federal government’s initiative to provide cheaper electricity to industries on an incremental consumption basis for four months under the winter package.
However, he urged the government to involve KCCI in finalizing industrial tariffs based on the cost of service to address the issue of cross-subsidy for domestic users, which is eroding the competitiveness of exports.
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President KCCI highlighted discussions with the Federal Secretary of the Ministry of Energy (Power Division), Rashid Mehmood Langrial, during his recent visit to KCCI. Although KCCI initially proposed a discounted electricity rate of Rs18/KWh, after thorough deliberation, it was mutually agreed to offer a discounted electricity tariff of Rs20/KWh on incremental consumption during this year’s winter season.
President KCCI emphasized that the government should expedite the release of Rs7 billion for incremental consumption, as committed by the Federal Secretary, which has not been adjusted by KE (K-Electric) so far.
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Iftikhar Ahmed Sheikh stated that there is no need to revisit the process for introducing industrial tariffs on incremental consumption. However, if deemed necessary, KCCI, which has conducted significant groundwork in this regard, should be included as a party to decide industrial tariffs under the winter package. He pointed out that in 2020, a discount scheme titled “Use more Pay Less Package” was introduced at a rate of Rs 11.97/KWh for incremental consumption.
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While appreciating the efforts of the Special Investment Facilitation Council (SIFC), President KCCI emphasized that gas tariffs should be cost-based, and cross-subsidization must be discontinued promptly. This would enable Pakistani exporters to compete effectively with their regional counterparts, boost exports, enhance revenue for the government, and create ample employment opportunities, ultimately contributing to economic progress and prosperity through industrialization and increased production activities.
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Involving KCCI in the decision-making process related to industrial tariffs can help ensure that the interests of businesses and industries are effectively represented and that policies are aligned with the goal of improving Pakistan’s economic competitiveness and growth.
