ISLAMABAD : July 23,2023: Mian Akram Farid, chairman of Employers Federation of Pakistan, while addressing an emergency meeting, said that the rising prices of electricity and gas have become a big threat to the people and the economy.
“If energy prices continue to rise, thousands of businesses will close, exports will fall and millions of people will be unemployed,” Mian Akram Farid said the energy sector has become a major economic threat.
The sector faces problems like capacity charges, inadequate bill collection, theft, line losses, subsidies, poor governance, and increasing corruption.
alking to the business community, the veteran business leader said the power sector faces losses of Rs 600 billion every year and consumers have to pay 71% of the capacity in their electricity bills. 25 to 27,000 MW, so the government needs to install power plants of 27,000 MW capacity.
The business leader said consumers will have to pay an additional Rs 800 billion annually for new power plants to meet the growing demand. He observed the need for reforms in the sector, which would eliminate power losses and capacity payments to boost industry and promote trade, employment and exports.
The IMF has been assured that a plan has been drawn up to end the circular debt, the implementation of which will bring the situation under control, but it has not yet succeeded. The first assurance of debt relief was given in 2008 when it rose from Rs 51 billion to Rs 189 billion in five months.
Now the circular debt of electricity and gas sectors has increased by more than three thousand billion rupees and the government keeps on increasing the rates, he said that the increase in tariff has nothing to do with the reforms. He added that the revenue volume of the central government was more than the loans and interest payments before the previous government. Yet the importance of debt and interest payments was also higher than total revenue during this regime.
The government does not have the resources to modernize the country or the welfare state because it cannot ensure survival and if the loans are delayed, there will be big problems.
He said increasing government expenditure, imports, circular credit, unemployment, inflation, declining exports, remittances, revenues and employment are rapidly pushing Pakistan towards crisis. It will bury us if shortcuts are taken to raise rates instead of fixing the damage through reforms. .
Otherwise, the economy will sink, he warned. Increase in electricity and gas rates is a major threat to the economy. EFP has always supported reducing business costs in Pakistan, providing a healthy and conducive environment. The government should provide an enabling environment for business to flourish. This will have a negative impact on the economic activities in the country as it will be difficult for businesses to meet their financial needs.