ISLAMABAD: The government will cut power supply to industries by 10 hours a day in Ramazan as it looks to provide uninterrupted electricity to domestic consumers at Sehri and Iftar times, highlighting its failure in resolving the sector’s problems despite making it the topmost priority.
The government’s decision to divert electricity from factories during Ramazan also negates its claim of ending load-shedding in the country.
The decision has sent the influential textile lobby in a panic. Representatives rushed to Islamabad on Wednesday, asking the government to change its mind.
The All Pakistan Textile Mills Association (Aptma) - the representative body of the industry - held back to back meetings with Finance Minister Dr Miftah Ismail and National Assembly Speaker Sardar Ayaz Sadiq.
However, both dignitaries were unable to give concrete assurances, and the matter will now be taken up in a meeting of the Economic Coordination Committee (ECC) of the cabinet on Thursday (today).
Aptma is putting pressure on the government just two weeks before the end of parliament’s term. It has given a final push to force the outgoing government to accept its major outstanding demands of uninterrupted power supply in Ramazan and continuation of former prime minister Nawaz Sharif’s Industrial Support Package. The support package promises Rs3 per unit reduction in electricity tariff.
“We have heard Aptma’s concerns and a decision in this regard will be taken by the ECC,” said Ismail after holding parleys with the delegation. The finance minister said that the industry wanted reduction in announced load-shedding period of 10 hours.
Due to higher demand for electricity, governments of Pakistan Peoples Party and the PML-N have been diverting electricity supplies from factories to homes in a bid to avoid public backlash. However, the PML-N government had promised to end this crisis, and made the power sector its topmost priority in five years.
Yet, at the end of its term, the result is the same. Its sole focus remained on enhancing power generation capacity but it forgot to also enhance the capacity of power transmission lines.
Outstanding circular debt stands at over Rs500 billion, excluding another Rs500 billion that is parked in a government holding company and is being serviced by charging Rs0.43 per unit from consumers.
“We want the government to increase gas supply from six hours to ten hours a day and provide only 80 megawatts of electricity to those industries that do not have energy backup plans,” said former Aptma chairman Ijaz Gohar.
He said that Punjab-based industries are becoming uncompetitive due to supply of cheaper fuel to Sindh-based industries. Gohar said that 10-hour-a-day electricity load-shedding could lower exports by $500 million per month. The finance minister said that Aptma has also demanded continuation of the Industrial Support Package, mainly lowering its tariff by Rs3 per unit.
However, former finance minister Ishaq Dar had linked the tariff reduction with the fuel price adjustment. He deducted the benefit of negative fuel price adjustment, which lowered the effective rate of subsidy to only Rs1.54 per unit.
Due to increase in prices of crude oil in the international market and determination of new electricity tariffs by the National Electric Power Regulatory Authority (Nepra), the finance ministry is no more in a position to withhold benefits. But at the same time, it is unwilling to continue the package and quietly moved a summary in the ECC last month to discontinue the package.
However, Prime Minister Shahid Khaqan Abbasi blocked the bureaucracy’s move to increase electricity prices for industrial consumers through the withdrawal of Rs3-per-unit subsidy. The decision to withdraw the subsidy would have made exports uncompetitive in addition to denting the PML-N’s vote bank in Punjab.
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On April 12, PM Abbasi had constituted a committee to resolve the issue of continuation of the industrial support package. The committee would meet on Thursday before the ECC meeting and finalise its recommendations for the ECC, said Federal Minister for Commerce and Textile Pervaiz Malik, while talking to The Express Tribune.
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The support package remained under implementation but the finance ministry honoured it only till June 2017.
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The Aptma also demanded from the finance minister to release the outstanding amount on account of withheld sales tax refunds and textile package. Outstanding liabilities stand at around Rs27 billion, an amount the finance ministry has not fully booked in the budget.
Published in The Express Tribune, May 17th, 2018.
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