Industries are at risk as energy costs rise

KARACHI:

Rising gas and electricity prices threaten to shut down industries, increase unemployment and worsen inflation, lamented industrialists.

Speaking to The Express Tribune, President of Federal Association of Commerce and Industry (FBATI), Syed Raza Hussain highlighted the impact of gas tariff hike on small and medium entrepreneurs who are already facing cost of production and competitive prices.

“The relentless rise in natural gas prices will have dire consequences for SMEs, including cost cutting leading to unemployment and retail price hikes, exacerbating inflation alongside escalating electricity and petroleum product prices” , Hussein warned.

Calling for a review of government policies, Hussain urged a shift towards pro-industry and pro-business decisions to boost production and tax revenue.

The President of Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Atif Ikram Sheikh, reiterated the concerns, particularly on the alarming rise in fixed gas prices, which could spell disaster for Pakistan’s industrial sectors.

Sheikh highlighted the ripple effect of rising energy costs, leading to higher production costs that are passed on to consumers, exacerbating economic pressures amid persistent inflation.

He called for a comprehensive reassessment of energy pricing frameworks, pointing out the unfeasible manufacturing landscape and deterring domestic and foreign investment in Pakistan.

Hyderabad Chamber of Small Traders and Small Industries, President, Muhammad Farooq Shaikhani has questioned the rationale behind a recent electricity price hike approved by the National Electricity Regulatory Authority (NEPRA).

Reading NEPRA is considering a record hike of Rs 5.62/unit in electricity rates

Shaikhani highlighted government decisions contributing to rising cyclical debt and closing down of industries, seeking clarity on the reasons behind the significant fuel adjustment hikes.

Hyderabad Chamber of Commerce and Industry (HCCI) president Adeel Siddiqui slammed the caretaker federal government for its failure to prioritize renewable energy generation. He pointed out that this negligence led to a recent hike of Rs 4,567 per unit cost in fuel prices, which was approved by NEPRA for December 2023 bills.

In a statement issued late on Monday, Siddiqui lamented the decline in renewable energy production in 2023 compared to 2022 figures. He condemned the administration’s incompetence, noting that consumers will bear the brunt. of this increase in fuel prices, reflected in their February bills after NEPRA’s approval.

Siddiqui urged for the rehabilitation of closed power plants and underlined the importance of investment in research and advanced technology to meet power generation needs. Specifically, he proposed using locally produced coal to run the 1,300 MW Jamshoro Coal Plant. Furthermore, Siddiqui underlined the need to enhance the efficiency of electricity distribution companies.

Published in The Express Tribune, February 20^u2024.

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