KARACHI: Pakistan is heading towards the worst food inflation amid hike in tariff of electricity and increase in prices of petroleum products, the apex trade body said on Friday.
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Suleman Chawla, Acting President of Federation of Pakistan Chamber of Commerce and Industry (FPCCI), in a statement on Friday 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 indices, he added.
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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.
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Chawla apprised that the collective price spirals through combined multiplier effects of fuel and power prices will affect the masses the worst through food inflation; who will be further hit 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 engines 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.
