KARACHI: Sindh Commerce Minister Muhammad Younus Dagha has said the Karachiites pay at least Rs3 to Rs5 per unit extra to K-Electric on account of fuel cost adjustment (FCA) every month as compared to other distribution companies (Discos) because of KE’s obsolete power generation plants which need to be unbundled.

“The electricity supply system stands completely unbundled across Pakistan where distribution and generation are treated separately but KE is the only utility service provider which solely generates and distributes electricity to consumers,” he said while speaking at a meeting during a visit to the Karachi Chamber of Commerce and Industry (KCCI) on Wednesday.

Mr Dagha agreed that the case of incremental consumption of electricity during the winter season has not been presented properly to the IMF as it was logical to utilise the idle capacity which would bring down the circular debt.

Dagha says winter incremental consumption case not presented properly to IMF; industries should get gas supply at cost

He advised the business and industrial community to approach the IMF’s Islamabad Office and also submitted their reservations about the misrepresentation of the incremental consumption case.

He said worldwide gas tariff for industries is subsidised while the residential consumers are subjected to higher costs but unfortunately in Pakistan, the industries are subsidising all other sectors which is purely against international best practices.

He added that structural changes in consultation with the business community are needed to rectify all issues in the energy sector so that the industries alone could not bear the burden of exorbitant gas tariff hikes.

Cross-subsidisation by raising tariffs for industries and keeping them down for others is not a wise move. Industries should only be burdened with gas costs while cross-subsidy should not be applied to industries, he said.

Mr Dagha said Faisalabad, Lahore and other cities having a unified voice had succeeded in compelling the government to fulfil their demands and Karachi, despite contributing massive revenue and exports, is not given much attention due to lack of unity among industries.

He said he would try to arrange a meeting of representatives of KCCI and other industrialists with the chief minister at the earliest so that we could together suggest structural changes and the same can, subsequently, be taken with the federal government.

Joining via Zoom, Chairman BMG Zubair Motiwala said the overall industrial performance has declined dramatically during November due to an unbearable gas tariff hike which can be confirmed from 25pc drop in gas offtake of SSGC to industries.

Referring to IMF’s move to turn down requests to provide electricity at lower rates during four months on incremental consumption, he said that it was purely in favour of the economy which would have been a perfect source of dealing with many economic issues including the circular debt and created a win-win situation.

Published in Dawn, November 16th, 2023