Industrialists reject power tariff hike, cut in gas supply

Industrialists have expressed concern over the hike in energy tariff and discontinuation of gas supply to the factories generating their own electricity.

In a statement on Friday, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Nasser Hyatt Maggo and other office-bearers said that the government was making efforts to appease the International Monetary Fund (IMF) at the cost of industries.

“We reject the government’s action of raising power tariff and periodically increasing prices of petroleum products as they will have grave implications for the cost of production in the industrial sector,” he said.

“They will also negatively impact ease of doing business, exports and the economy.”

FPCCI officials stressed the need for a review of the two measures, citing that the industrial sector was the key consumer of energy and intrinsically helped the national economy.

On the other hand, SITE Association of Industry President Abdul Hadi pointed out that gas supply to only Karachi industries was suspended, which was discriminatory.

“Some industries cannot run entirely on power supply from distribution companies,” he said.

“Substandard power supply from the distribution firms damages the hi-tech machinery of the industry.”

Captive power plants of industrial units could generate electricity at Rs13 per kilowatthour (kWh) while K-Electric charged Rs20 per unit, hence the giant difference would dent the revenue of the manufacturing units, he said. Sui Southern Gas Company (SSGC) has started removing gas connections of Karachi industries by attributing it to a cabinet decision, said Businessmen Group Chairman Zubair Motiwala.

“It has issued notices to over 400 industrial units for removing gas connections and has cut off connections of more than 120 units,” he said. “Industrialists have invested billions of rupees in factories of Karachi and now their money is at risk.”

He was of the view that suspension of gas supply to the industries would cause irreparable damage.

Besides the export-oriented companies, those working on import substitution would also suffer massively, he said.

The biggest victims of the decision would be small-scale factories and industrial units, which were the backbone of the country, Motiwala said and called on Prime Minister Imran Khan to immediately intervene in the matter.

Karachi Industrial Forum Chief Coordinator Javed Bilwani said that captive power plants of industries ran on combined cycle and had an efficiency of 60-65%.

According to the National Electric Power Regulatory Authority (Nepra), a majority of power plants of K-Electric are running at lower efficiency.