titans and economic managers in the country agree that the country should have uniform energy tariffs. Subsidies on electricity, gas and petroleum products should immediately be removed for all sectors, expect lifeline consumers. Leading business executives and economic managers, including Federal Minister for Finance Dr Abdul Hafeez Sheikh, State Bank of Pakistan (SBP) Governor Shahid Hafiz Kardar, Planning Commission of Pakistan Deputy Chairman Dr Nadeem ul Haq, former ministers Shaukat Tareen, Humayun Akhtar Khan, Jahangir Khan Tareen, Sartaj Aziz and Nishat Group Chairman Mian Muhammad Mansha, have unanimously said that multiple energy tariffs and subsidies are the root cause of all economic problems of Pakistan.
They were address at Pakistan Today’s Pre-Budget Seminar held here on Sunday. Speaking on the occasion, SBP Governor pointed out that the government had to pay Rs120 billion on account of electricity subsidy last year. He was of the view that due to huge subsidies the fiscal position of the country was not improving. Energy shortage had already shattered investors’ confidence and created production bottle necks, which resulted in that neither the country was achieving growth targets nor businesses were viable. He underlined that subsidies and security expenditure eat away a major chunk of government revenues, merely peanut were left for development.
Federal Finance Minister Dr Abdul Hafeez Sheikh said that the government made the right decision by increasing the electricity tariffs by 60 percent. He said that to find a way towards growth path, the country had to get rid of subsidies. Former commerce minister Humayun Akhtar Khan said that it had been envisioned that the country’s export would jump up to $25 billion, but it would not be possible when the country had no energy. Industries were neither getting electricity nor natural gas. The country had excessive fiscal deficit of six percent, but subsidies were being maintained.He underlined that though the economic indicators were slightly improved during the last three years, but it happened only because of external flows.
He said if the government ensured gas and electricity, private sector could do anything. While former minister for industries Jahangir Khan Tareen said that the government had to withdrawn subsidies form electricity and gas to provide level playing field. In addition, there was a need to stop the electricity and gas theft; otherwise the situation would never improve. He also stressed that the government had to make quick and wise decisions to get rid of the economic problems. The government announced that Pakistan would import liquefied natural gas (LNG) but even after two year nothing concrete was on ground, while the country’s trade and industry was suffering severe electricity and gas load-shedding. Former finance minister Sartaj Aziz said that growth rate in per capita term was reached to zero. Energy shortage and prices had reached all time high.
He pointed out that every new power plant was increasing the electricity generation cost, which needed government attention. He said that the country had to rely on inexpensive sources, which were hydel, otherwise economic revival would never going to be happen. Former finance minister Shaukat Tareen underlined that energy crisis was a result of faulty planning. He pointed out that the country was facing power outages, when it had 19,000 MW installed capacity, but it was generating only 12,000 MW. He stressed that there was a need of targeted subsidies as only few were eligible of government support. If the government did not withdraw subsidies the crisis would go for years. Planning Commission Deputy Chairman Dr Nadeem ul Haq dubbed subsidies a loss.
He said that a major portion of power was being wasted in power pilferages in the system. Planning Commission had Rs4 trillion development projects in pipeline, but in present circumstance the government had to cut the development expenditure to meet funds for subsidies. Nishat Group Chairman Mian Muhammad Mansha underscored that there was a dire need to immediately rationalise the energy tariffs. Whole energy mix had become a mess due to multiple tariffs and concessions. He said how did you expect that all sectors of the economy could perform equally, when the country had 10 gas tariffs. He urged the government to offer uniform tariffs regime to all sectors and withdrew subsidies.