Karachi : The government and concerned authorities should release the allocated
funds on account of incremental benefit subsidy electricity to
industrial units of Karachi, mainly Small and Medium Enterprises
(SMEs) to prevent the closure of large-scale economic activities and
layoffs in different sectors of commercial and industrial hub of the
country, said President Federal B Area Association of Industries Syed
Raza Hussain.
He pointed out that the government released power subsidies to
industries of different cities but it only paid an amount of Rs. 9
billion to subsidies of Karachi as against the allocated amount of Rs.
42 billion as part of the relief to industries from COVID-19 economic
downturn during FY20-23, but the financial relief was discontinued due
to disagreements between the industries and the K-Electric.
The power utility company wants the federal government to release
funds for these subsidies to their account first. In contrast, the
government directed KE to release the funds first and recover the
amount as reimbursement.
This situation resulted in an uncompetitive pricing environment
because electricity unit cost stood at Rs. 20 higher than the
industries of different cities. In order to retain their market
presence, the industries of Karachi continued their supplies to their
buyers with losses, hoping to overcome the high cost losses from the
amount of incremental benefit subsidy.
At present, NEPRA directed K-Electric to release the remaining
allocated funds to the Karachi industries after the decision of its
tribunal in favor of industries.
Raza Hussain mentioned that industrial production and economic
activities are decreasing in Karachi as the current electricity cost
spiralled up unabated, which also resulted in layoffs in different
industrial zones. The immediate transfer of subsidies may aid
industrial units in reviving their production and economic activities.
He called on Federal Minister for Energy Owais Leghari and Minister of
State Muhammad Ali to address this discrimination urgently, urging the
removal of specific surcharges imposed exclusively on Karachi
consumers as they are unjustified.
He proposed increasing the gas supply to K-Electric to reduce
electricity costs, as the current generation from RLNG is highly
expensive. The delay in subsidy distribution and high electricity
costs have led to warnings from industrial leaders that protests,
including sit-ins and demonstrations, may be inevitable if the
situation is not resolved soon, President FBATI said.
