Pakistan Business Forum (PBF) President Khawaja Mahboobur Rehman has strongly demanded that the government re-evaluate the policy of continuously increasing energy prices on an immediate basis.
Particularly, the decision to increase the captive gas price to Rs2,750/MMBtu, an increase of 223% since January 2023 threatened the very survival of Pakistan’s industrial sectors and a complete collapse is imminent.
He said the direct consequence of spiralling energy costs is an increase in production costs across all industrial sectors, forcing businesses to pass these costs onto consumers. This results in widespread price increases; exacerbating the financial strain on consumers already battling relentless inflation for the past two years, he added.
Read: Industries at risk as energy costs surge
PBF President stressed that the consumer demand was poised to reduce further as a result; which would further prompt a reduction in manufacturing activities. The resulting inflation also rules out any possibility of a reduction in interest rates in the foreseeable future; leading to the further downfall of the private sector.
Khawaja Mahboob urged the government to conduct an all-encompassing reassessment of its energy pricing framework as electricity prices for industrial consumers are well above 17 cents/kWh which is twice as high as those in regional economies like Bangladesh and India.
With yet another increase in gas prices, manufacturing activity is no longer financially feasible in Pakistan and there will be no investment – domestic or foreign in the country under these conditions.
Published in The Express Tribune, February 24th, 2024.
COMMENTS (1)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ