Roll Back FAC & Fixed Charges on Electricity; Waive 3 Months Bills for Floods-affected Industries

Karachi (PR): Mr. Irfan Iqbal Sheikh, President FPCCI, has decried the ruthless and consultation-less consecutive increases in the electricity tariff will force shut the industry across Pakistan; as achieving a break-even in the current cost of doing business environment has become impossible, leave alone being competitive in the export markets.

Mr. Irfan Iqbal Sheikh maintained the process which started 4 months back; and will fully reflect in electricity bills in another 2 months; means a cumulative increase of 70 – 80 percent, if all billing components are accounted for, i.e. base tariff, sales tax, income tax and excise duty. Base tariff alone has been increased by PKR. 9.80 / unit, reflecting an increase of 50 percent and the all-inclusive cost per unit will be close to PKR. 60.

FPCCI Chief said that the government should be cognizant of the fact that these are counterproductive and counterintuitive measures; as these kinds of electricity bills are not even payable or recoverable. Therefore, there are major defaults and bankruptcies on the cards, he added.

Mr. Irfan Iqbal Sheikh explained that after two months, when the full quantum of increased bills will be evident, there will certainly be production losses and loss of output; which will put even repeating the export performance of the last year in jeopardy. It is pertinent to note that country’s exports in the first month of FY23, i.e. July 2022, have already fallen by 24 percent.

FPCCI President has proposed that in order to cope with the double whammy of floods-related losses to the SMEs, the government must consider waiving electricity bills for 3 months. It will make it possible for SMEs to continue operating and generating jobs to the level of pre-monsoon months of the current calendar year.

Mr. Irfan Iqbal Sheikh emphasized that this year we should aim for an export target of $37 – 38 billion; however, given the current circumstances, it appears that we might not even be able to sustain the FY22 level of $31.845 billion. He added that only textile sector may witness a decline by the large margin of $2 – 3 billion in FY22; which is more than 10 percent of their total exports.

Mr. Suleman Chawla, Senior Vice President FPCCI, has demanded that the fuel adjustment charges (FAC) and fixed charges should be rolled back immediately to provide some relief to the export-oriented industries to enable them honor the contracts signed before the current torrent of increases in power tariff.

Brig Iftikhar Opel, SI (M), Retd.

Secretary General