Businesspersons slam hike in power tariff

KARACHI: Businesspersons have showed concern over the increase in the base tariff of power by Rs7.90/unit as well as provision of expensive oil and RLNG to power plants for industrial and residential consumers in Karachi.

Federation of Pakistan Chambers of Commerce and Industry Vice President Shabir Hassan Mansha commenting on the tariff raise termed it shocking for the industry, as it would raise the cost of production immensely and make Pakistani goods uncompetitive in the international market.

“Though the price of fuel has increased, the tariff raise is so huge that it would fall out of the affordability of industry,” he commented.

Consumers would not have to pay Rs24/unit, but Rs33/unit after adding taxation. He said that input cost of industry was already on the higher side, and the latest tariff raise would cripple the sector, particularly the export-oriented sector.

Karachi Chamber of Commerce and Industry (KCCI) President Muhammad Idrees rejected the unlawful increase in electricity

base tariff by Rs7.90/unit for the 2022-23 budget, likely to be announced by the National Electric Power Regulatory Authority (NEPRA). He said it would prove detrimental for the industries due to high cost of doing business.

“It will also add to inflation in addition to making electricity bills costlier and unaffordable for consumers,” he said, pointing out that the exorbitant hike in base tariff would escalate prices of all household goods.

Increase in base tariff was clearly unlawful as it was in violation of NEPRA’s rules and regulations, he said, reminding that “any increase in tariff has to be determined and implemented only after holding public hearings”. Unfortunately, they have not done so and solely decided to raise the base tariff which was unacceptable.

Hike of Rs7.90/unit would raise the base tariff to Rs24.41/unit from the existing base tariff at Rs16.51/unit, which would not only put the survival of industries at stake but also make the lives of poor public more miserable.

“Every month electricity consumers pay an additional amount in between Rs4 to Rs6/unit on account of fuel cost adjustment due to unprecedented rise in fuel prices in the international markets, while Rs7.90/unit addition in base tariff would make finished goods uncompetitive in international markets and unaffordable in local markets,” he said, adding that the economy and businesses would only

flourish with lower cost of doing business, as well as lower tariffs for electricity, gas and water.

“We appeal Prime Minister Shehbaz Sharif to take notice of NEPRA’s unlawful actions and issue strict directives to NEPRA follow the rules and regulations, which compel the regulator to hold consultations with stakeholders and implement increase in tariff only after holding public hearings, he added.

Expressing deep concerns over enhanced load shedding being carried out by K-Electric in many areas of Karachi, he said that KE was facing a shortfall of 400MW mainly because Bin Qasim Power Station-III was currently generating only around 200-350MW electricity against its total capacity of 900MW.

Although tuning and maintenance of the machines installed at BQPS-III was currently underway, this has to be expedited and completed within the shortest possible time so that relief could be provided to the perturbed Karachiites.

Korangi Association of Trade and Industry (KATI) President Salman Aslam has expressed concern over the government’s provision of oil and expensive RLNG to power plants for industrial and residential consumers in Karachi. He said supplying RLNG at Rs4,700/MMBTU instead of natural gas at the rate of Rs857/MMBTU would make electricity unaffordable for all consumers.

Aslam said that this discrimination would impose an additional burden of Rs13 billion, which was unbearable for both, industries and people.

Sui Southern Gas Company (SSGC) was in violation of the load management policy approved by the federal cabinet and orders of the Sindh High Court by providing only 13MMBTU to Karachi instead of 100MMBTU. “It is feared that Rs12/unit on electricity bills will increase in terms of fuel adjustment,” he added.

KATI president said that industries in Karachi, especially SMEs could not tolerate a 25-30 percent increase in electricity.

Aslam appealed to the government to urge the SSGC to provide indigenous natural gas to K-Electric instead of RLNG so that the consumer of Karachi would not get affected by fuel surcharges, and expensive unit costs.

This would allow the economy to continue running on low-cost electricity generation. He also demanded K-Electric to ensure cheap power generation for the consumers of Karachi by reducing their dependency on oil and RLNG.