Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain said on Friday that the rising electricity and gas prices have become a big threat to the people and the economy. He said that if energy prices continue to rise, thousands of businesses will close, exports will plummet, and millions will be unemployed.
Mian Zahid Hussain said the energy sector has become a major economic threat. This sector faces issues like capacity charges, inadequate collection of bills, theft, line losses, subsidies, poor governance, and increasing corruption.
Talking to the business community, the veteran business leader said that the power sector faces losses of Rs 600 billion every year and that consumers have to pay 71% capacity payment in their electricity bills.
Because the need for electricity in Pakistan is 12 thousand megawatts in winter and 25 to 27 thousand megawatts in summer, the government needs to install power plants with a capacity of 27 thousand megawatts, he said.
The business leader said that consumers must pay an extra 800 billion rupees annually for new power plants to satisfy the increasing need.
He observed a need for reforms in this sector, which will make power cheaper by eliminating power losses and capacity payments to boost industry and promote commerce, employment, and exports.
The government has been assuring the IMF for the last 15 years that a plan has been drawn up to end the circular debt, whose implementation will take the situation under control, but it has yet to succeed.
Mian Zahid Hussain said the first assurance of eliminating the infamous debt was made in 2008 when it increased from 51 billion to 189 billion rupees in five months.
For decades, neither the IMF’s demands nor our excuses have changed. Now, the circular debt of the electricity and gas sectors has increased by over three thousand billion rupees, and the government continues to increase the rates, he said, adding that the tariff hike has nothing to do with reforms.
Mian Zahid Hussain further said that the volume of central government revenue was greater than the number of loans and interest payments before the previous government. Still, the importance of loans and interest payments was also greater than the total revenue during that government.
The government does not have the resources to make the country a modern or welfare state as it cannot ensure survival, and if there is a delay in obtaining loans, big problems will arise.
He said that rising government expenditure, imports, circular credit, unemployment, inflation, declining exports, remittances, revenue, and employment are rapidly pushing Pakistan towards crisis.
It will bury us if shortcuts are taken to raise rates instead of fixing the losses through reforms. Before the election, the country needs a caretaker prime minister and a cabinet that can solve the pressing problems. Otherwise, the economy will sink, he warned.
