SMEs in Pakistan demand resumption of regionally competitive energy tariffs

Raw material shortage and import restrictions impede Pakistani Industries, risk losing foreign buyers

According to an article in Dawn, the export-oriented businesses in Pakistan are facing immense pressure from a range of factors including the withdrawal of subsidized electricity, restricted imports, high-interest rates, and a devalued rupee against the US dollar. 

President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Irfan Iqbal Sheikh, expressed concerns that the private sector in Pakistan is under considerable distress with consistently dried-up investments. He criticized the government for its handling of the IMF programme and lack of transparency, which has eroded the confidence of businessmen in government policies. Mr. Sheikh demanded clarity on what steps the government will take to stabilize the economy and when it will consult with the business community.

Mr. Sheikh also criticized the government’s decision to increase the revenue collection target and the withdrawal of subsidized electricity tariffs for export-oriented sectors on the IMF’s directives. The Businessmen Group (BMG) chairman, Zubair Motiwala, and SITE Association of Industry president, Riaz Uddin, also condemned the government’s decision, arguing that it would further tax an already burdened industry, decrease employment opportunities, and hurt Pakistan’s competitiveness in the world markets.

Nepra’s endorsement of the government’s decision to withdraw subsidized electricity for export-oriented industries has adversely affected SMEs and disrupted the entire supply chain of exporting industries. The factory owners, employing more than 100,000 workers, demanded the resumption of the Regionally Competitive Energy Tariff (RCET) and warned that the closure of many industries due to raw material shortage is causing foreign buyers to look for alternative suppliers. 

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