Exporters’ woes: Relief in electricity tariff welcomed

FCCI chief says problems still persist for industries

FAISALABAD: Faisalabad Chamber of Commerce and Industry President Rizwan Ashraf said on Thursday that Rs2.68 per unit decrease in Fuel Adjustment charge is a welcome relief but the government needs to put the tax issue on hold till energy prices have stabilised.

He said that Pakistan has been experiencing energy crisis for the past two decades. The successive governments, instead of generating cheap electricity, chose to provide short term relief which eventually pushed expensive thermal power into the energy mix pushing electricity tariff to an unbearable level. Intermittent outages, coupled with costly electricity, have eroded the profitability of the exporters. He said that artificially pegging the rupee value against that of dollar has also contributed to the losses. Exporters have borne a cumulative loss of Rs7 billion owing to the reasons cited, according to Ashraf.

Ashraf said that the economy is continuously suffering a two per cent GDP loss due to energy shortage and most factory units have either been closed down or working at only 40-50% of their installed capacity. Recently, however, the industry was exempted from load-shedding of electricity but it continued to face acute shortage of gas. Even in summer, industries in Faisalabad were getting 33% of gas quota affecting their productivity.

Referring to lifting of the economic sanctions on Iran, he said that after the oil price cut it is yet another blessing for Pakistan. He added that since economic sanctions have been lifted, completion of the Pak-Iran Pipeline shouldn’t be a problem.

Ashraf said that work is expected to commence on the TAPI gas pipeline but it will take two to three years to complete. He added that Pak-Iran Pipeline is the most feasible solution to energy woes since the distance is considerably short and consequently, the timeframe for completion will be too. He was of the opinion that Pakistan could get gas from Iran within months if the remaining pipeline can be speedily completed on Pakistan’s end.

Published in The Express Tribune, August 7^th,  2015.

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