Pakistan business leaders demand major cut in power tariffs
Business leaders in Pakistan demand major cuts in electricity prices to boost industrial competitiveness and economic growth.
Industrialists and business leaders in Pakistan are sounding the alarm over skyrocketing energy costs, demanding an immediate and significant reduction in electricity tariffs to prevent a total collapse of local industrial competitiveness.
Speaking at high-profile receptions in Hyderabad, prominent figures from the business community highlighted how the current energy pricing structure is pushing Pakistani products out of the regional market, making it nearly impossible for local factories to compete with neighboring countries.
The Competitive Gap: 12 Cents vs 7 Cents
S.M. Tanvir, the Patron-in-Chief of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), provided a stark comparison regarding the cost of production. While he noted that electricity costs for Pakistani businesses have seen a slight decrease—dropping from approximately 17 cents to 12 cents—the figure remains unacceptably high compared to regional peers.
- Pakistan Industrial Electricity Cost: ~12 cents
- Regional Competitor Electricity Cost: ~7 cents
Tanvir emphasized that for Pakistan to foster genuine economic growth and revitalize industrial activity, the government must bridge this massive gap. He warned that without lower energy costs, the nation's industrial sector will continue to struggle against international competition.
Taxation Woes and FBR Intimidation
Beyond the electricity bills, the business community expressed deep frustration over the broader economic environment. Tanvir raised several critical concerns that are currently stifling growth:
- Multiple Taxation: The burden of overlapping taxes is squeezing profit margins.
- High Policy Rates: Expensive borrowing is making capital investment difficult.
- Fuel Shortages: Inconsistent energy supply is disrupting production cycles.
- FBR Conduct: Tanvir made serious allegations regarding the Federal Board of Revenue (FBR), claiming that officials have been entering factories and intimidating business owners.
Despite these grievances, the leaders maintained a pragmatic stance, acknowledging that tax revenue is essential for keeping the national economy functional. However, they argued that the system must be simplified and the enforcement must be professional rather than coercive.
Infrastructure and Economic Zones
To drive future growth, the FPCCI leadership suggested a strategic shift toward specialized industrial hubs. Tanvir called for the establishment of more special economic zones, drawing inspiration from successful models in Dhabeji and Khairpur.
In Hyderabad, the conversation turned toward logistics and local capacity. FPCCI President Atif Ikram Shaikh assured the local community that their grievances would be taken to the highest levels. He also mentioned plans to discuss the introduction of a cargo railway service in Hyderabad with the federal railways minister to ease the movement of goods.
The Potential of Hyderabad's Industrial Sector
The scale of what is at stake was highlighted by Nadeem Siddiqui, the President-elect of the Hyderabad Chamber of Small Traders and Small Industry. He revealed that the SITE industrial area is a massive economic engine, generating an estimated Rs120 billion to Rs200 billion through industrial production.
However, Siddiqui warned that this immense potential is being throttled by crumbling infrastructure. Outgoing President Saleem Umer Memon echoed these sentiments, calling for a simplified taxation system and modernized facilities to ensure that the business community can continue to contribute meaningfully to the national economy.