The All Pakistan Textile Mills Association (APTMA) has expressed deep concern over the “absolutely dismal state of the power sector” and emphasized the dire need for power tariff rationalization to prevent further economic deterioration.
In a statement, ATPMA extended its gratitude to Federal Minister for Energy Muhammad Ali for taking cognizance of the high power tariffs and their negative fallouts. Furthermore, APTMA urged him to expedite the reform process considering the gravity of the situation.
APTMA said that power consumption for the first 20 days of December declined by 26 percent year-on-year for industrial consumers and by 8 percent for domestic consumers on the LESCO network, driven by a decline in high-end domestic consumption.
The statement said that the government must carefully review power tariff policies to reverse the incoming catastrophe. Power tariffs must be reassessed and revised to an economically optimal level that increases power consumption and power sector revenue.
A rational tariff for industrial consumers will stimulate industrial activities across the economy, increase power consumption and allow for a sustainable and financially viable power sector. It will also create incentives for industry to move away from RLNG/gas-based captive generation, freeing up indigenous resources and bringing down the energy import bill, it added.
It said that growth in industrial activity, especially in export sectors, will also revive millions of jobs and potentially add millions more to create income and allow households to come out of lifeline and protected categories, further increasing power sector revenue and reducing the quantum of cross subsidization.
However, the power division’s current policies—like most other policies, and especially those on taxation—are built on the philosophy of taking an ever-increasing share of an ever-shrinking pie by squeezing those who are productive to the point that there is no benefit in being productive and no one is willing to work because they know that whatever they make, the government will take from them in one way or another to finance its own shortcomings, it added.
APTMA said that the economy is stuck in a vicious cycle where ever-increasing power tariffs are causing power consumption to decline continuously to the point where Pakistan will have power companies but no consumers for them to cater to. The only way to come out of this cycle is to rationalize power tariffs at levels that stimulate the economy and allow for sustained levels of higher power consumption and therefore higher power sector revenue.
