The ISLAMABAD management group of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) expressed anger at the frequent rise in prices of electricity tariffs and petroleum products over the IMF’s best, as well as appease Independent Power Generators (IPPs). This move will spoil the Prime Minister’s vision of reducing the cost of industrial production.
Mian Anjum Nisar, chairman of the FPCCI’s ruling party Businessmen Panel, said that the constant increases in energy rates, the best of the IMF, would make Pakistani products uncompetitive in the international market.
While speaking to a trade delegation with a trade delegation in his office, Anjum Nisar rejected the recent government move to raise the cost of energy by more than 15%, as well as to lift oil products rates twice a month to qualify for the revival of the discontinued $ 6 billion IMF loan. program takes the economy to a point of no return due to the intervention of the International Monetary Fund.
Instead of the dismissal and judicial review of Independent Power Generators, the authorities abolished the core power tariff, prioritized the interests of the IPPs, and put aside the interests of the general trade and industry as well as the public.
Mian Anjum Nisar said that the regular attempts by economic managers to raise oil prices, as well as increasing electricity and gas tariffs, would ultimately undermine the government’s overall move to reduce the cost of production in the country announced by the Prime Minister. SMEs and reduction of profit rate to 7 percent by SBP.
He said that previous governments, as well as current governments, had to make an exorbitant increase in energy tariffs simply because they paid IPPs for overcapacity in dollars, and that the government led to a further increase in public debt and ultimately ended. consumers.
The main reason for the increase in cyclical debt is government guarantees of the rate of return to IPPs, not rupees, but in the past the continued depreciation of the local currency against the dollar has caused trillions of losses.
Mian Anjum Nisar said that it is compulsory to make electricity and gas tariffs for domestic and export sectors in accordance with the tariff applied in the region and neighboring countries. “The industry is currently paying more than twice the price of electricity compared to the regional tariff of about 7.5 cents / unit in neighboring countries,” he said, adding that the only way to get more investment in the country is a lower energy tariff. He said the country could improve economic growth and job creation by overcoming inefficiencies in the electricity sector, which should focus on eliminating waste, promoting the transition to cleaner energy and attracting private investment.
The main cause of the chronic and growing circular debt problem is the size of the guaranteed capacity payments or the fixed costs paid to Independent Power Plans (IPPs).
He said that the total cyclical debt increased by Rs 538 billion at a rate of approximately Rs 45 billion per month in fiscal 2019-20. In the period of July-November 2019-20, cyclical debt increased by Rupees 179 billion at the rate of Rupees 36 billion per month. It should be remembered that the previous government cleared the circular debt of Rs 480 billion in July 2013.