Severe power breakdowns hit trade, industry

F.P. Report

KARACHI: The Federation of Pakistan Chambers of Commerce & Industry’s Businessmen Panel (BMP) on Sunday called for formulating a reform strategy on an emergency basis, taking urgent measures as severe power suspension has been hitting the trade and industry due to electricity shortfall of around 6,500MW, as demand has reached almost 30,500 MW whereas supply was just over 24,000MW.

Federation of Pakistan Chambers of Commerce & Industry (FPCCI) former president and BMP Chairman Mian Anjum Nisar observed that the government’s inability, ill planning and financial woes have multiplied the miseries of the trade and industry who are facing unscheduled power loadshedding across the country, in addition to higher electricity bills, as they are paying heavy electricity bills of up to Rs50 per unit including surcharges and other taxes.

Mian Anjum Nisar asked the authorities to take quick action, taking notice of forced loadshedding in the industry because of non-availability of fuel, technical faults, failure in purchasing of fuel and maintenance of the power plants, leading to crunch of thousands of megawatts across the country.

While addressing a meeting of the business community, convened to discuss the loadshedding issue, he said that all the major industrial cities of the country are facing unannounced electricity loadshedding due to which the production activities are badly suffering. He said that rural areas are also reportedly facing severe loadshedding at a time when the mercury is on the rise and this situation is making the life of common man more miserable.

Mian Anjum expressed concern over long power outages and stressed the need to rectify technical faults immediately.

The BMP Chairman also called for urgent measures not only to improve the economic situation but also to overcome the power shortage.

He condemned the government plan to raise base tariff between Rs4 to Rs5 per unit from next fiscal year. He said that the main reason for the huge shortfall was massive rise in demand owing to scorching heat, less supply of RLNG and other fuels to generation plants and limited capacity of plants to purchase fuel as government is not clearing their due energy costs.

He said that the country’s forex woes are unlikely to allow the government to take a prompt decision for purchase of three additional cargoes of LNG on spot whose price is around $ 13.4 MMBTU in the international market.

He noted that during April 2023 to September 2023 terminal capacity for additional 2-3 LNG cargoes per month is available at Terminal-2, while spot LNG prices are currently at $ 13.4 MMBTU ($ 43 million per cargo).

Accordingly, the PLL had suggested that power sector be requested to analyse the possible savings with respect to power generation based on imported additional LNG through replacement of any other fuel.

However, Power Division did not respond to the PLL on its proposal within a specific time due to which the country lost the chance to purchase LNG at cheap rates.

He called upon the government to take urgent measures to curb the rising power loadshedding as it will badly hit the business and industrial activities.

He said that the country has an installed capacity of electricity of over 39,000 MW, but currently the system is producing 23000 MW of electricity, which shows the inefficient performance of the power sector.

He said that Pakistan’s energy sector has been facing great losses and distortions in the distribution sector for years, costing the national exchequer billions of rupees annually.

He said that the unannounced prolonged load shedding in Industrial Areas would bring economic activity to a grinding halt and to bring the industrial sector out of mire; the government would have to take measures on war footing to end the power outages.

He said that due to long power outages, industrial production is at the lowest and if the situation remains the same, industrial units would left no option but to close down their operations.

He said that defiantly there was a shortage of electricity in neighbouring countries as well but they have given priority to the industrial sector. He said that the government would have to reset its priorities to cope with this crisis like situation.

He said that the government would have to conduct a detailed study of various industrial sectors to finalise load shedding schedule for them.

He urged the Prime Minister to direct the concerned authorities to ensure continuous supply of electricity to the industrial areas as the ongoing situation was not only putting a negative impact on overall economy but was also causing unemployment in the country.

He said that the acute power shortage was also discouraging any new local and foreign investment and now all the foreign investors preferred to shift their investments to the neighboring countries at a time when almost all the countries of the world were striving to attract new investments.

FPCCI former president also stressed for bringing drastic improvement in the performance of power companies as uninterrupted supply of electricity to businesses and industries is the key requirement to ensure better growth of economy.