ICCI for passing on full benefit of dwindling oil prices to local consumers with proportionate cut in power tariffs
The Islamabad Chamber of Commerce and Industry (ICCI) has resented the government’s move to reportedly withhold Rs 0.6 per unit out of Rs 2.97 per unit reduction in electricity tariffs approved by National Electric Power Regulatory Authority (NEPRA) for the consumers of 9 distribution companies and called upon it to ensure full implementation of 20 percent reduction in power tariffs in order to provide direly needed relief to business community and the general masses.
ICCI President Muzammil Hussain Sabri said that NEPRA on Friday had approved Rs 2.97 per unit decrease in power tariff under the automatic monthly fuel price adjustment for the month of November while the consumers were to get a relief of another 49 paisa per unit (a total of Rs 3.46 per unit) on account of proportionate decline in General Sales Tax (GST).
But the government’s move to deduct Rs 0.6 per unit from Rs 2.97 per unit for debt servicing of power sector has effectively deprived the consumers of a relief of about 70 paisa per unit, which is a great injustice to them, he said.
He added that it was not a wise move to divert a relief in fuel prices to debt servicing because fuel price adjustment was not a cost of service, rather it was a direct pass through cost of fuel.
He said whenever oil prices in world market went up, government lost no time in passing on its whole impact to the consumers by raising electricity tariffs but now when the oil prices have tumbled more than 45 percent, it was unfortunate that government was hesitant to pass on its full benefit to the people.
He said the existing power tariff in Pakistan was around Rs 14 while with the addition of 17 percent GST and 3.5 percent excise duty, it goes up to Rs 16.95, which was highest in the region.
He said in India and Bangladesh, the tariff for the same unit was reportedly Rs 7.36 and Rs 5.47 respectively, while in the US, it was equal to Rs 8.59 and he wondered how Pakistani exporters could compete with regional competitors with such huge disadvantage in power tariffs.
He said that 40 percent energy in Pakistan was generated through furnace oil and after more than 45 percent fall in international oil prices, the business community was expecting the proportionate reduction in power tariffs and urged that government should make due cut in electricity prices.
He said the pro-furnace oil policy for power generation has pushed up manifold the cost of doing business apart from putting heavy burden on the common man and stressed upon the government to look for cheaper alternative sources of energy, which would create multiple benefits to the economy as it would bring down production cost, facilitate growth of businesses, attract more investment, promote exports and reduce inflation bringing more relief to the general public.