Increase in power tariff vexes industry

Published January 23, 2021
FPCCI President Mian Nasser Hyatt Magoo said that instead of reforming the energy sector, ad hoc and painful decisions were being made which are detrimental to domestic industry. — Dawn/File
FPCCI President Mian Nasser Hyatt Magoo said that instead of reforming the energy sector, ad hoc and painful decisions were being made which are detrimental to domestic industry. — Dawn/File

KARACHI: Expressing concern over the Rs1.95 per unit electricity tariff hike and gas disconnection to the industry, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Employers’ Federation of Pakistan (EFP) on Friday decried the decisions.

FPCCI President Mian Nasser Hyatt Magoo said that instead of reforming the energy sector, ad hoc and painful decisions were being made which are detrimental to domestic industry.

The much awaited outcome of negotiations between the government and independent power producers (IPPs) — which were aimed at reduction in base tariff — did not produce desired results which again is a shocking outcome and questionable, Magoo said.

The spokesman of the energy ministry had attributed the need for tariff hike to bad and corrupt agreements made with IPPs in the past.

“If this was an issue, such a situation needs to be corrected through invoking all the civil and criminal remedies to correct the agreements by excluding ‘pay or take’, reducing O&M cost, converting the repatriation cost from dollar indexation to rupee and relevant recommended measures in the report,” the FPCCI president said in statement.

While appreciating the present government for ordering the inquiry in respect of agreements with the IPPs, the FPCCI chief said the outcome does not appear to be reciprocal for base tariff reduction and availability of electricity sale at reduced cost.

He further said that the announcement of Rs40 billion per year off-take of financial burden on the government is marginal even against the present announced tariff base hike wherein the Re1 hike is overcharging consumers Rs100bn on consumption of electricity.

“The hike, if linked to any part of the memorandum of understanding with the IMF can be fairly convincing for freezing such tariff hike when the fund itself projected low economic growth. Such duplicity cannot be justified,” he said.

Published in Dawn, January 23rd, 2021

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