LAHORE: Caretaker Federal Energy Minister Mohammad Ali has said the government is committed to eradicating corruption in the power sector.
He said that in last two weeks, power theft worth Rs6 billion had been detected and action was taken against culprits.
Accompanied by Caretaker Federal Minister for Commerce, Industries, and Production Gohar Ejaz, he discussed pressing economic matters during meetings at the Lahore Chamber of Commerce and Industry (LCCI) and All Pakistan Textile Mills Associations (APTMA).
He addressed the issue of gas pricing, stating that changes would be announced soon but emphasised the need for gradual adjustments under the IMF programme.
Muhammad Ali noted that the price of gas varied between regions, with the North having higher prices than the South. He mentioned the insufficiency of long-term LNG contracts and ongoing efforts to combat electricity theft. He also hinted at gas tariff increase in next two weeks.
Textile leaders plead their case with the energy minister, who acknowledged their problems. However, he explained that things would improve gradually. Government’s hands were not only tied by the IMF but also by the lack of resources. He said the prices of gas would have to be increased to save distribution companies from loss. He said a formula was being worked out under which the lifeline consumers would be charged at a fixed rate of Rs500 per month. For other users, he added, tariff would increase sharply. The largest users will be charged at the price of LPG. He said for the industrial sector, there was a sharp difference in gas tariff between South and North. He said modalities were being developed to bridge that gap. However, he clarified that average unified gas tariff was not possible as under the constitution, North that produces gas had the right of its first use. Though the government had the right to fix gas tariffs, the huge difference between two regions could not be reduced appreciably. Regarding power, he said the situation was complex and could not be addressed immediately. He said NEPRA was asking for Rs28 as wheeling charges, which was unrealistic and the private sector producing power away from their production lines could not afford to wheel their electricity. He said the problem was being sorted out.
Minister for Commerce, Industries, and Production Gohar Ejaz emphasised that concrete measures were being taken regarding Afghan Transit Trade (ATT). Only essential goods would be allowed under the ATT to curb dollar flight and smuggling. Gohar Ejaz pointed out that the exchange rate had soared from Rs160 to over Rs300 in the past year, with the Afghan transit trade contributing significantly to this increase. The minister highlighted that industry inputs, raw materials, and energy prices were influenced by international markets, making exports vulnerable to currency devaluation. However, recent efforts to control the exchange rate had yielded positive results. He told textile players that synthetic textile products worth $3.5 billion were entering Pakistan through ATT, which had been stopped and it would boost the local textile industry. He said this year the exports would increase by $10 billion to $37 billion, against the official target of $32 billion. He said that was doable and he had chalked out a plan in that regard. He expected the textile sector would add $75 billion and the non-textile sector $2.5 billion. He said before leaving his office, he would submit a comprehensive plan to increase exports to $100 billion out of which $50 billion would come from textiles only.
