Demand for cheap electricity: ICCI expresses concern over gas tariff hike

Decision would increase cost of doing business, make exports uncompetitive

ISLAMABAD: The Islamabad Chamber of Commerce and Industry (ICCI) has shown concerns over the more than 2% hike in gas tariff for the power sector, which is now Rs613 per million British thermal units (mmbtu), and called upon the government to review the decision.

“It would further push up the cost of doing business in the country and make exports uncompetitive in the international market,” they said.

ICCI Acting President Sheikh Pervez Ahmed lauded the government on reducing the gas tariff for fertiliser producers by Rs76.59 per mmbtu. However, he said relief to the fertiliser sector at the cost of the power sector was not a wise move as increase in power tariff would multiply problems for the business and industry.

“Per unit cost of electricity in Pakistan is reportedly 14 cents while in India it is 9 cents, 8.5 cents in China and 7.3 cents in Bangladesh. It shows that the power tariffs are the highest,” he said.

Pakistan’s total exports during the first half of 2015-16 (July-December) witnessed a decline of 14.4% to $10.322 billion against $12.058 billion in the same period of last year

Ahmed said electricity was the key input for the industry and any increase in its cost would translate into a higher production cost, higher prices for consumer, slump in business activities and exports, low revenue generation and an overall negative impact on the economy.

He urged the government to reconsider its decision and instead focus on power generation through cheap sources like water, coal and renewable energy sources.

Published in The Express Tribune, May 1^st, 2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.