- FPCCI Pushes for Inclusive Winter Package for SMEs
- Current Electricity Tariff Structure Limits SME Access to Relief
- Industrial Shutdowns in Faisalabad Highlight Cost Challenges
- FPCCI Calls for Lower Interest Rates to Support Industry
In a push for fairer energy pricing, Qurrat Ul Ain, Acting President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has called on the government to extend the new electricity tariff relief to small and medium enterprises (SMEs). While welcoming the government’s winter package, which offers a Rs. 26/kWh rate on additional electricity consumption, she highlighted that the relief is only available to businesses consuming more than 100,000 units in the previous year. She emphasized that this limitation excludes SMEs and new industries, leaving them disadvantaged compared to larger corporations.
Ms. Qurrat Ul Ain noted that SMEs, which form the backbone of Pakistan’s economy, often lack the financial ability to meet such high thresholds. Without access to the reduced tariff, smaller businesses will struggle to expand their operations and improve their production capabilities. “If the winter package isn’t accessible to smaller and emerging businesses, we risk stalling industrial growth and missing the potential boost in exports and local trade,” she stated.
In a stark reminder of the challenges facing Pakistan’s industrial landscape, the FPCCI chief pointed out that around 100 textile units in Faisalabad have already shut down. High electricity tariffs, combined with a policy interest rate of 15%, make Pakistan an expensive place to do business compared to regional competitors. Despite core inflation being recorded at 7.2% in October 2024, the interest rate remains high, creating an unsustainable burden on businesses. Ms. Qurrat Ul Ain urged the State Bank of Pakistan (SBP) to consider bringing the interest rate down to single digits to reduce costs and support industrial growth.
Adding to these concerns, FPCCI Vice President and Regional Chairman, Abdul Mohamin Khan, highlighted the annual losses of around Rs. 600 billion booked by electricity distribution companies (DISCOs). He stressed the need for better management to reduce these losses, which could then be reinvested to offer more affordable tariffs for businesses.
Mr. Aman Paracha, another FPCCI Vice President, spoke out against recent moves by K-Electric to increase tariffs. He cautioned that further rate hikes would place an additional strain on businesses in Karachi, already grappling with rising operational costs.
The FPCCI’s leadership has collectively voiced a demand for the government to consider the unique needs of SMEs and the industrial sector at large, in the hopes of fostering a business environment where smaller companies can flourish alongside larger ones.