Islamabad
The All Pakistan Business Forum (APBF) has rejected the frequent increase in prices of electricity, gas and petroleum products, saying the massive jump in electricity base rates and petroleum products prices would make local products uncompetitive in the international market.
The APBF president held an emergent meeting of stakeholders on higher electricity tariffs, stating that NEPRA’s latest forecast for power purchase prices for the current fiscal year reveals a substantial financial burden, with consumers to bear 300% of costs for fixed capacity payments. He was of the view that substantial fuel costs, particularly petroleum imports, potentially pose extreme volatility and strain on foreign exchange reserves.
APBF President Syed Maaz Mahmood remarked that at a time of unsatisfactory export volumes and low industrial growth, the hike in electricity base tariffs for the industry, especially for the SMEs, was really surprising. If the decision is not withdrawn, it will prove dangerous for the country’s SME sector, he stressed.
He said that the ever-increasing cost of production in the country is the real threat to both large-scale manufacturing (LSM) and small-scale businesses (SMEs), as frequent upward revisions in policy rate and continuous fluctuations in rupee against dollar are posing further challenges for the economy.
APBF Chairman Ibrahim Qureshi while describing the government’s decision to increase electricity tariffs as an incorrect move, urged the government to reverse the proposed increase.
The government’s decision to increase the electricity tariff is anti-industry, and the APBF strongly condemns the government’s decision and calls on it to withdraw this move.
The APBF leader said the unprecedented increase in fixed charges was tantamount to destruction of industries and burying people alive. The traders warned of the government for launching an agitation campaign.
They also made it clear that if in case, the decision couldn’t be withdrawn immediately, aggressive and harsh steps would be taken against unfair and unjust hike in fixed charges, and government and relevant authorities will be responsible for any unfortunate incident, he added.
He said the government should prioritize resolving the energy crisis by providing sufficient and affordable electricity and gas to industries. The import bill should be reduced by imposing bans on luxury products.
He highlighted controlling inflation to ensure affordable living costs for the masses and containing the cost of production for businesses at a local level.
He stressed the need for a revisit of the economic policies, as the economic indicators throughout the 2024 remained very depressed amidst high inflation, low exports, depleting foreign reserves and continued uncertain position of the local currency.
He said that the aggressive economic measures, high borrowing rates, inflation, oppressive taxation and unstable currency have been negatively affecting running businesses, many of which have closed their operations.
He said that with a view to deal with fiscal challenges the government will have to work on the three-way strategy by implementing short-term goals that will help to keep generating resources for smooth fiscal operations, medium-term goals where the government should focus on financial inclusion, documenting the economy by designing a system where all businesses can be registered and properly document their income including collection of sales tax, initiating the process of privatisation as well as improving governance by introducing reforms in each sector.
Syed Maaz Mahmood said that the increase in base rate of electricity is also part of pact signed between the government and IMF, which says that the government has to notify NEPRA’s determinations without any delay and amendment.
