KATI demands release of Rs33bn power subsidy

KARACHI: The Korangi Association of Trade and Industry (KATI) has urged the government to immediately release the pending Rs33 billion electricity subsidy, which is vital for Karachi’s industrial sector.

During a press conference, President of KATI Johar Qandhari highlighted the urgent need to address the inequities faced by Karachi’s industries, which have been deprived of a substantial portion of a subsidy that was originally allocated to support them during the Covid-19 pandemic.

Qandhari explained that the subsidy, known as the Covid Incremental Subsidy, was set at Rs42 billion over three years: Rs22 billion for 2021-22, Rs13 billion for 2022-23, and Rs7 billion for 2023-24. However, despite this allocation, Karachi has only received Rs7-9 billion, leaving a massive Rs 33 billion still pending. In contrast, industries in other regions have received their full subsidies, allowing them to offer more competitively priced products and placing Karachi’s industrialists at a further disadvantage.

Qandhari criticized the delays in subsidy distribution, attributing them to ongoing disputes between the government and K-Electric. He noted that this delay has forced Karachi’s industrialists to sell their products at a loss, as they are paying more than Rs50 per unit for electricity, compared to Rs30-32 per unit for industries elsewhere in the country.

Qandhari demanded an end to the discriminatory practices against Karachi’s industries. He also called for the immediate removal of the Rs3.23 per unit PHL charge and the Rs1.52 per unit surcharge imposed solely on Karachi consumers. He argued that these charges, related to circular debt, are unfair, as Karachi’s consumers are not responsible for this debt.

Qandhari also suggested that the government provide an extra 100 mmcfd of gas from the Mari Gas field to K-Electric. This would facilitate the generation of cheaper electricity, potentially reducing the cost per unit by Rs13.98.

He highlighted that electricity generated from RLNG for Karachi is currently the most expensive in the country, costing between Rs26.93 and Rs38 per unit, due to the high RLNG price of Rs3,600 per mmbtu.