Impact of soaring power tariffs on traders discussed

Islamabad:Presently, Pakistan grapples with High electricity tariffs, and this situation has inflicted significant hardships upon businesses across the nation. Both large-scale industries and smaller enterprises, including retailers, find themselves contending with the burdensome weight of soaring electricity expenses. In light of this pressing matter, the Islamabad Chamber of Small Traders and Small Industries has convened a conference. The conference agenda centred on the impact of high electricity tariffs on industries, retailers, and consumers.

The Islamabad Chamber of Small Traders and Small Industries extended an invitation to Sardar Yasir Ilyas Khan, the former president of ICCI, to serve as the chief guest at the conference. During the event, he engaged with various notable figures including Sajjad Sarwar (president of ICSTSI), Tariq Mehmood Khokhar (senior vice president of ICSTSI), Syeda Wajida Saleem (Vice President & Chairperson of the Diplomatic Affairs Committee of ICSTSI), and the Executive Committee Members of ICSTSI. Accompanying Sardar Yasir Ilyas Khan were prominent industry leaders such as Amir Hussain (CEO of Tesla Pvt. Ltd), Mr. Umar Hussain Malik (Director of Karachi Steel), Muhammad Omais Khattak (Managing Director of Khattak Sons Pvt. Ltd), Hafiz Bilal from the soap industry, along with other dignitaries in attendance.

Speaking at the conference, Sardar Yasir Ilyas Khan, CEO of The Centaurus criticised the government’s policies regarding power supply, highlighting their mishandling of the situation through elevated electricity tariffs and their adverse effects on both large and small industries, as well as on retailers and consumers. He emphasised that the escalation in electricity prices directly results in augmented operational expenses for industries and enterprises. Particularly susceptible are industries heavily reliant on electricity, such as manufacturing and data centers. Small businesses operating on narrow profit margins might encounter challenges in absorbing the heightened costs, potentially leading to decreased profitability or even closures.

The escalation in electricity expenses can erode the competitive edge of industries and enterprises, especially within the global markets. In August 2022, the off-peak change was 29%, and the peak change was 22%. In August of this year, 2023, the off-peak change is 27%, and the peak change is 22%, resulting in an 87% change in off-peak and a 66% change in peak rates over the course of one year. He said when one country experiences a significant increase in electricity prices compared to its competitors. It may encounter heightened production costs, rendering it less competitive in terms of pricing. This scenario might compel industries and enterprises to postpone or curtail their investment and expansion initiatives due to uncertainty surrounding future electricity expenditures. The consequences of this can be felt in economic growth and job generation. Furthermore, elevated electricity costs can contribute to overall inflation in an economy, impacting not only businesses but also consumers, who may experience elevated prices for various goods and services.

Sardar Yasir Ilyas Khan urged the government to provide targeted subsidies or temporary reductions in tariffs, especially for energy-intensive industries.