Special power tariff for export sector must to compete globally

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LAHORE - The Pakistan Tanners Association, commenting on recent decision of federal government of exorbitant increase in power tariffs, has suggested special tariff for export sector, saying it will cause irreparable loss to export industry.

PTA central chairman Agha Saiddain said that increase in power tariffs of B1, B2, and B3, is average 50 per cent and industry cannot sustain to this huge increase. He suggested that like many other countries export sector should have been exempted from recent increase.

“By this decision we have made all exportable items uncompetitive and the decision will bounce back with negative impact on our economy. The government should have taken into consideration the negative impacts of the decision on various sectors of our economy.”

He recommended lower tariffs for export industry to save our export. He further added the decision will have serious negative impact on our export industry which may result with monstrous gap in our balance of trade and balance of payments. He recommended the federal government to revise the decision and special power tariff may be announced for export sector.

“The leather industry is a major contributor to the exports and GDP growth besides creating jobs for the manufacturing sector work force. However, the industry would not be able to perform if its sustainability is being compromised time and again and pushed to energy crisis. This situation is hitting the viability of the industry, especially the Punjab-based industry.” he said.

PTA chairman said that at a time when the business community was already paying high cost of doing business because of unavailability of gas and electricity, the decision is devastating. He said the hefty increase in power tariff would also adversely affect competitiveness of Pakistani merchandise that had already lost their due place in a number of global markets due to high costs. “The country had already lost a number of international markets to China, Bangladesh and India due to high cost of doing business.”

He said that in the international market the profit margin fluctuates between 0.5 per cent to 0.8 per cent, therefore after the recent increase there would hardly be any buyer for Pakistani goods.

Mr. Agha said that if the increase was necessary, then it should have been implemented in phases instead of making the huge increase in one go. He opined that government move was bound to increase the incidence of electricity pilferage that already is 25 per cent of the 22 per cent line losses and devouring Rs50-75 billion.

Courtesy:   The Nation

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