Rise in energy prices will double production cost, says FCCI

VIAImran Rana
SOURCEThe Express Tribune
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FAISALABAD:  Any increase in electricity and gas tariffs would almost double the cost of production, instead of giving relief to the crisis-ridden industrial sector, said Faisalabad Chamber of Commerce and Industry (FCCI) President Shabbir Hussain Chawla.

In a statement, Chawla cautioned that such a decision, without consulting stakeholders, would have negative repercussions for the already dwindling exports.

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He reminded Pakistan Tehreek-e-Insaf (PTI) government that before coming to power, the party had assured industrialists that it would take necessary measures to cut down the production cost, in addition to providing maximum relief for the industrial sector. He pointed out that recent reports about planned increase in gas and electricity prices were in stark contrast to the earlier promises and industrialists and exporters were already facing the spectre of high cost of doing business.

Rates of electricity and gas in Pakistan were already the highest in the region, particularly as compared to competitors, the FCCI president said, adding the high cost of doing business, coupled with other policy measures, hit the industrial sector badly and its exports were declining continuously.

He claimed that many reputed industrial groups had been closed down and many others had become sick whereas the remaining units were continuing their operations just to maintain their reputation in international markets. “Closure of the industrial sector has caused unemployment which is the main cause for increase in street crimes,” he said.

“The government alone cannot provide jobs for the increasing population and hence it should take measures to revive the private sector on a priority basis.”

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Moreover, he said, Punjab-based industries were getting gas at Rs1,300 per million British thermal units (mmbtu) whereas in other provinces industrialists enjoyed cheap, safe and environment-friendly fuel for only Rs480 per unit. Thus, Punjab-based industries were at a disadvantage and were unable to compete domestically as well.

(This news/article originally appeared in The Express Tribune on September 9th, 2018)

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