ISLAMABAD: Karachi’s steel industry is facing a dire situation as it grapples with the inaction of the Power Ministry and the National Electric Power Regulatory Authority (NEPRA).
The industry’s concern revolves around the unequal implementation of the Government’s Incremental Units Consumption Subsidy, a measure designed to alleviate economic challenges in the post-COVID period.
According to a letter of Pakistan Association of Large Steel Producers (PALSP) sent to relevant ministries, this stark disparity has raised questions about the commitment of state authorities towards ensuring equitable support for businesses.
As per the association, the Incremental Units Consumption Subsidy, which provides a fixed rate of 12.96 PKR per unit for energy consumption exceeding the reference period, has proven to be a lifeline for industries across the country. However, the situation takes a grim turn when examined through the lens of Karachi’s steel industry. Since July 2021, these industrial units have been entangled in a web of bureaucratic obstacles and neglectful responses from relevant authorities. This has resulted in them being deprived of their rightful share in the subsidy package.
At a time when economic uncertainty and rising energy costs are challenging industries nationwide, Karachi’s steel industry is contending with an additional burden—the denial of a subsidy package that was approved and budgeted. The incremental units subsidy for K-Electric Industrial Consumers, amounting to PKR 22 billion in 2021-22, PKR 13 billion in 2022-23, and PKR 7 billion in 2023-24, remains frustratingly out of reach, despite being allocated in the annual government budgets.
Assurances from prominent figures, including the Ex-Chairman of NEPRA and the current Secretary of Power, have yet to translate into concrete relief for the steel industry in Karachi. This oversight has left these businesses in a state of uncertainty and financial strain, causing them to question the government’s commitment to supporting industries during times of need.
Having exhausted all available avenues, the affected industries, including the steel sector, have resorted to legal action. Appeals have been filed with NEPRA, the Ministry of Energy (Power Division), the Competition Commission of Pakistan, the NEPRA Appellate Tribunal, and the Sindh High Court. Regrettably, these efforts have encountered a frustrating lack of response and meaningful action.
The evident inequality in the implementation of the Incremental Units Consumption Subsidy underscores a disconcerting narrative. It raises fundamental questions about fairness, justice, and the government’s dedication to nurturing industries across the nation. Such disparities erode the trust of businesses and hinder their ability to thrive amidst challenging economic circumstances.
The ongoing situation serves as a stark reminder of the uphill battle faced by Karachi’s steel industry and the indifference displayed by relevant authorities. As these businesses navigate the complexities of the economic landscape and navigate soaring energy costs, the absence of the promised relief stands as a discouraging example of bureaucratic inefficiency and a lack of empathy. To achieve its economic aspirations, it is imperative for the government to address the grievances of Karachi’s steel industry and demonstrate unwavering commitment to fostering an environment of equal opportunities and support.
