HYDERABAD: The president of the Hyderabad Chamber of Small Traders & Small Industry (HCSTSI), Mohammad Saleem Memon, has warned that Pakistan’s energy sector has devolved into a severe economic crisis.

He noted that exorbitant electricity tariffs, heavy taxation, and massive capacity payments to Independent Power Producers (IPPs) have placed the national economy under immense stress.

In a statement issued here, Mr Memon lamented that whilst the public battles inflation, unemployment, and unbearable power costs, trillions of rupees are being funnelled into a flawed financial structure with zero economic return.

He highlighted media reports indicating that billions of rupees have been squeezed from citizens through additional petroleum levies and inflated electricity bills over recent years. Concurrently, an astronomical Rs3,400 billion is diverted annually to IPPs in the form of capacity and contractual payments.

He questioned how long a system that stifles industrial growth and penalises traders and the public could be sustained.

Citing National Electric Power Regulatory Authority (NEPRA) reports, Ministry of Finance data, and various policy assessments, the trade chief pointed out that the energy sector’s circular debt currently hovers between Rs2.6 trillion and Rs3.2 trillion.

Because the IPPs must be paid regardless of actual power generation, the per-unit cost of electricity continues to climb, directly impacting industry, trade, and domestic consumers.

The industrial sector, he added, is under severe strain due to heavy taxes, fuel adjustment charges (FAC), and soaring energy prices.

This has significantly inflated the cost of production compared to regional competitors, eroding export competitiveness and triggering a dangerous decline in industrial activity and employment opportunities.

Published in Dawn, May 18th, 2026