Steel manufacturers laud PM for relief in power tariff for industries

LAHORE: The Pakistan Association of Large Steel Producers (PALSP) on Wednesday welcomed the Pakistan Tehreek-e-Insaf (PTI) government’s step to reduce power tariffs for Small & Medium Enterprises (SMEs) and industries.

In a letter written to Prime Minister Imran Khan, PALSP Secretary General Syed Wajid Iqbal Bukhari said the government’s decision “is an unprecedented step towards improving the country’s economy and reducing inflation”. 

Bukhari, however, added that there were still two major concerns that needed to be addressed and fine-tuned for the betterment of the economy. 

He said that the classification of 50 per cent rebate to B-1 to B-3 and 25pc to B-4 would result in disrupting level playing fields in different industrial sectors. “Many sectors are highly fragmented and if this classification is followed, many Large Scale Manufacturers (LSMs) would become uncompetitive.” 

He said that it would be more apt if the classification was carried out on a sectoral basis instead of on the basis of the electricity connection’s size, suggesting that higher rebate can be extended to sectors directly affecting inflation.  

Bukhari maintained that since steel is a highly fragmented industry with many smaller units in the B1-B3 category and electricity is a major cost component for making steel irrespective of scale, the current proposal to give extra incentive to units on B1-B3 feeders will hurt a large fragment of the sector and lead to unfair competition.  

The PALSP secretary general said that the steel association insists on a reform rebate throughout the sector irrespective of whether the rebate percentage.  

“Secondly, the baseline of electric consumption should be from November 2018 to April/June 2019 instead of November 2019 to April/June 2020 as the latter tenure was affected by the Covid-19 pandemic and hence will result in an inaccurate depiction of electricity consumption baselines,” he added. 

“Our association is not demanding any additional incentives but requests an alignment of incentives in the interest of the economy of Pakistan,” Bukhari said. 

Moreover, the officer appreciated the premier’s interest in addressing challenges that the steel industry has been facing.

“We stand with the government and support its vision of “Make in Pakistan” and we do hope that the government’s policy of supporting the domestic industry will be enduring,” he concluded.