Hyderabad : President Hyderabad Chamber of Small Traders & Small Industry (HCSTSI), Muhammad Saleem Memon, has appreciated the recent reduction of Rs. 7 per unit in electricity prices announced by the Government of Pakistan. However, he described this move as insufficient in addressing the grave concerns of the industrial sector.
He recalled that when the current government assumed power in 2022, the average industrial electricity tariff was Rs. 18 per unit. Over the course of three years, this steadily escalated to Rs. 48 per unit by April 2025. The recent cut of Rs. 7.69 brings the rate down to Rs. 40.51 per unit—still alarmingly high and barely a relief to the struggling industry. He emphasized that this symbolic reduction appears to be more of a temporary appeasement strategy rather than a reflection of real policy change, ignoring the practical realities on the ground.
Chamber President further highlighted that over the past three years, thousands of industries across the country have either shut down or significantly curtailed production. As per government and independent reports, more than 1,600 small and medium-sized enterprises have ceased operations since March 2022. Dozens of larger industries have relocated to countries such as Bangladesh, the UAE, and Vietnam, seeking affordable energy and sustainable industrial policies.
He pointed out with concern that even Vietnam, a country that endured decades-long wars with global superpowers and widespread devastation, has now emerged as a robust economy—far ahead of Pakistan in terms of exports, industrial growth, and foreign investment. This highlights the urgency with which Pakistan needs to reform its industrial and energy policies. President HCSTSI Saleem Memon identified one of the major factors behind the industrial crisis as the exorbitant electricity tariffs, driven by costly and unsustainable agreements with Independent Power Producers (IPPs). These contracts, he noted, are pegged to the US dollar, include unjustified capacity charges, and are structured on terms that do not align with national interests.
He lamented that since 2022, HCSTSI has repeatedly called for a comprehensive review of these power agreements.
Numerous written appeals and formal representations were submitted to the relevant authorities, yet no serious or effective action has been initiated. The government has neither fully reviewed the contracts nor opened the issue for public discourse or parliamentary debate. Chamber President also criticized the government's lack of transparency, especially in light of global market trends. In 2022, the price of crude oil was as high as $116 per barrel, yet domestic electricity tariffs were relatively lower. Today in April 2025, with crude oil prices nearly halved to $62 per barrel, power tariffs have inexplicably remained high or continued to increase. This raises serious questions about the sincerity and integrity of the government’s energy pricing mechanisms.
He expressed concern over Pakistan being among the few countries in the world where electricity bills are burdened with excessive taxes, surcharges, and adjustments. A typical industrial consumer ends up paying several times the base tariff due to over 17 additional charges—including fuel adjustment, general sales tax, FC surcharge, TV fee, fixed charges, and more. Such overburdening practices are virtually unheard of in both developed and developing economies.
Comparing with regional models, Mr. Saleem Memon noted that Bangladesh supplies electricity to its export sector at under Rs. 5 per unit, with the government bearing the subsidy burden. In China, industrial zones are offered free or highly subsidized utilities including electricity, water, and land to attract investment. Vietnam offers a 50% electricity subsidy to its export sector, which has helped accelerate its export volumes and economic growth. In conclusion, HCSTSI President Saleem Memon strongly urged the Government of Pakistan to initiate a national dialogue on IPP agreements, review and revise the contracts to remove unfair clauses, and reduce industrial electricity tariffs to at least Rs. 25 per unit to enable the revival of industry. He also called for the removal of unnecessary taxes and surcharges from electricity bills and demanded export-sector subsidies on the pattern of regional economies. Only through such bold reforms can Pakistan’s economy move toward stability and sustainable development.
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