Business Leaders Urge Lower Energy Tariffs to Boost Pakistan’s Exports
“These two steps would stimulate the industry with positive vibes,” he said.
He was talking to the minister during his visit to the regional office of the Federation of Pakistan Chambers and Commerce and Industry (FPCCI). Saquib Fayyaz Magoon, Acting President of FPCCI, Dr Gohar Ejaz, former Caretaker Federal Minister for Commerce, Industries, Investment & Interior, and Chairman of National Economic Think Tank, Zaki Aijaz, Regional Chairman and Vice President of FPCCI were also present on the occasion.
“The business community can generate taxes only if it is allowed to earn,” he stressed and added that a business-friendly environment can let the industry and trade grow to generate revenue.
He said there is no justification for exorbitant interest rates at 20.5 percent when the inflation has already come down to 12% in the country.
He stated that providing the industry with electricity at a rate of 9 cents/kWh would result in an increase of six billion dollars in exports, an additional demand of over 300 megawatts on the grid, revenue of Rs. 500 billion, and a reduction of Rs. 240 billion in debt servicing. He suggested to the finance minister to divert 240 billion rupees from PSDP to fulfill this cause.
Already, he said, the industry has been paying Rs240 billion in cross-subsidies and over Rs150bn in stranded cost.
Federal Finance Minister That The Business
He informed the federal finance minister that the business community could not secure orders from the international market on the stance that the government was charging it more under cross-subsidies. Why would international buyers prefer us against those from Vietnam, Bangladesh, and others getting energy at cheaper rates, he questioned.
He said the export industry is dying down and Pakistan is losing market share at a faster pace because the electricity is being provided at more than twice that of competing countries.
Resultantly, he said, an export capacity of $600 million/month remains unutilized in the country in a situation when a rapid increase in exports is the only remedy to meet $24bn/annum of gross external financing requirements, balance of payment issues, and job creation.
With the prevailing energy prices, he feared, 60-70% of the industry would shut down, especially when domestic gas rates for industry have been increased manifold.
Tanveer said uncompetitive energy tariffs hindering export growth and investment in the export sector.
He said everyone out of 228 chambers and trade associations throughout the country has become panicked after the announcement of the federal budget.
“Our group had envisioned $100 billion in exports by 2030 when we took over the FPCCI, and we are committed to achieving this goal. However, the current budget has significantly dampened our enthusiasm,” he deplored.
Mutib Khalid is a skilled content writer and digital marketer with a knack for crafting compelling narratives and optimizing digital strategies. Excel in creating engaging content that drives results and enhances online presence. Passionate about blending creativity with data-driven approaches, Mutib Khalid helps brands connect with their audience and achieve their goals.
