Business leaders criticise electricity ‘relief’

Business leaders have strongly criticised Prime Minister Shehbaz Sharif’s announcement of relief for electricity consumption within 200 units. They argue that the business and industrial sectors find no significant relief in this package. Small traders, shopkeepers, and industrialists require specific measures to boost industrial production and stimulate economic growth. Ignoring these sectors exacerbates the country’s economic challenges.

The current economic and political climate necessitates profound and lasting measures to alleviate the energy cost burden on the people and businesses of Pakistan, the business leaders said while talking to The Express Tribune. They stand ready to work with the government to develop comprehensive solutions ensuring sustainable relief for all.

PM Sharif recently announced a three-month relief period for lifeline consumers of electricity whose consumption remains below 200 units per month. “The government will give a discount of Rs50 billion to the electricity lifeline consumers in July, August, and September. For three months, 25 million consumers of the country will benefit from the government’s relief,” according to a post on the X account of state broadcaster PTV News. The initiative would benefit “94% of the country’s domestic consumers” of electricity.

Former president of the Employers Federation of Pakistan Majyd Aziz stated that the unbridled increases in infrastructure rates have devastated the low-income and marginalised population since their tight budgets force them to juggle between roti, kapra, makaan (bread, clothes, and house) and the electricity bill. The much-needed announcement by the premier may bring some momentary respite but would not alleviate the widespread despair.

The citizens, salaried or wage earners or even micro-business owners, are gradually being deprived of social safety nets and are terrified when they hear that more back-breaking announcements in utility rates and increases in inflation are in the pipeline. The upsurge in unemployment rates and business closures is negatively impacting the revenue of workers and employers.

It is imperative that pro-poor policies and decisions are immediately implemented, otherwise, the after-effects may debilitate the social ecosystem of Pakistan leading to unrest and mayhem. The poor suffer high electricity rates along with mega load-shedding, while the rich ostentatiously display the wastage and usage of electricity. The least the PM can do is to extend this relief from three months to twelve months, said Aziz.

In response to the recent relief package announced by the PM, Muhammad Farooq Shaikhani, President of the Hyderabad Chamber of Small Traders and Small Industry (HCSTSI), said this measure is insufficient and ineffective for providing long-term relief. The package is valid for only three months, far from being a permanent solution. This decision is taken under immense political pressure raised by the public for the sake of political face-saving.

“We require sustained reductions in energy costs to genuinely benefit the public and businesses. The high cost of energy, driven by capacity charges, remains unaddressed,” he said.

He demanded that the government reschedule these charges and undo agreements placing undue burdens on the public. This package inadvertently benefits those who do not pay their electricity bills, while honest consumers see no significant advantage. The PM claims that 94% of consumers will benefit, which is questionable, he said. Challenging the government to provide detailed figures supporting this claim, he said, most households consume more than 200 units of electricity. He called for accurate and transparent data are essential.

Shaikhani rejected this relief package as inadequate and short-sighted, while urging the government to implement permanent reductions in energy prices, reschedule capacity charges, and provide targeted relief for industrial and commercial users.

Chairman and Founder of the Pakistan Business Group, Farazur Rehman, has inveighed against the PM’s recent announcement of relief for electricity consumption within 200 units, dubbing the initiative as a “political move” suggesting that it serves as a distraction from the underlying issues within the country’s electricity system and is designed to placate the public with superficial benefits.

He said instead of addressing the fundamental problems and inefficiencies in the current system, the government is offering what he referred to as a “lollipop” to the innocent people. Furthermore, Rehman accused the government of attempting to obscure corruption within Independent Power Producers (IPPs).

He said the real threat to Pakistan’s economy is not the International Monetary Fund (IMF), but the IPPs and their beneficiaries. He warned that in the context of the severe economic crisis facing the country, any such subsidies and lavish government expenditures are unacceptable and unsustainable.