KARACHI: President Pakistan Business Forum (PBF), Mian Usman Zulfiqar criticized the government for massive increase in power and gas tariffs to meet the IMF condition, saying the minibudget would unleash a new wave of high inflation, further increasing the cost of doing business and leave Pakistani exports uncompetitive in the international markets.
In a statement issued on Saturday, he said that the already decline of 34 rupees in the value of local currency against dollar and 35 rupees hike in the prices of petroleum would create a ripple effect as it would badly squeeze the purchasing power, reduce growth of business activities making it more difficult to revive the dwindling economy.
Mian Usman Zulfiqar observed that it is unfortunate that the government has approved the passing of around Rs240 billion additional burdens on consumers through a direct tariff increase and an indirect increase through the withdrawal of subsidies given to exporters and farmers. He said that the government liquidity and external vulnerability risks are elevated and there remain considerable risks around its ability to secure required financing to fully meet its needs for the next few years.
The PBF President also said that constant hike in power tariff has pushed the electricity prices higher and added to the already soaring cost of trade and industry. He asked the government to shut down all expensive oil-based power plants to ensure availability of cheaper energy for consumers.
Usman Zulfiqar condemned the government for shifting power distribution companies’ inefficiencies’ burden to the consumers by jacking up the tariff under the guise of Fuel Charges Adjustment, as the ECC has also given the go-ahead to the recovery of pending fuel cost adjustment from consumers to collect Rs68 billion.
According to reports, the ECC has approved the withdrawal of electricity subsidies for farmers to save Rs14 billion in four months. The effective increase for the farmers will be around Rs3.30 per unit but they will still be paying subsidized rates.
