PTA laments the increase in electricity tariff

Pakistan Tanners Association (PTA) has lamented the increase in electricity tariff, which would increase cost of doing business. Mr. Anjum Zafar Chairman, PTA in a statement has strongly condemned the irrational & illogical increased of Electricity  Charges @Rs.3.90 per unit and effective for the collection from 2015 in Pakistan and treated this decision would be the last Nail on coffin of export Industries specially Leather Sector of Pakistan.   

He recalled that the Leather Sector of Pakistan, the 2nd biggest export oriented industry of the country contributing significantly to the country’s GDP, is already facing several problems/grievances and the cost of doing business in Pakistan has been increased manifolds. As a result, PTA members are unable to compete in international market as compared to our regional competitors particularly China, India & Bangladesh.

Mr. Anjum Zafar, Chairman, PTA also shared the cost of utilities charges in comparison with regional competitors as appended below, which shows electric tariff in Pakistan on higher side. He pointed out that Leather Sector of Pakistan is already confronting numerous problems in realizing/execution of export orders/activities with the potential foreign buyers/customers owing to high cost of production in Pakistan for leather, resultantly losing the share of the International markets and ultimately the export of leather sector has already been decreased to the alarming extent for the last consecutive 3 years:

Regional Comparison of Cost of doing Business 

 
 

 
 

Inputs

 
 

Pakistan

 
 

Bangladesh

Pak % Higher than Bangladesh

 
 

India

Pak % Higher than India

 
 

Vietnam

Pak % Higher than Vietnam

  

  

  

  

  

  

  

  

Electricity / kwh

$    0.11

$   0.09

22%

$    0.09

22%

$   0.08

37%

  

  

  

  

  

  

  

  

Gas

(Industrial Captive Power)/ MMBTU

$    7.68

$   3.01

155%

$    4.66

65%

$   6.00

28%

  

  

  

  

  

  

  

  

Minimum Wages per month

$ 135.00

$ 68.00

98%

$ 115.00

17%

$ 113.50

19%

The Chairman, PTA, Mr. Anjum Zafar opposed/condemned the proposed increase of Electricity charges in Pakistan in general and collection from 2015 in particular, which would be the highly detrimental/fatal for Leather Sector of Pakistan and said, “it is becoming impossible with hike prices of utilities and cost of doing business to compete in the world markets and export of Leather Sector of Pakistan would further be severely affected. How can we pass on the increased cost of electricity from 2015 to our customers now who were not calculated in prices when sold and nowhere in the world utilities are increased with retrospective affect. Moreover even this increase now will render Pakistan out of world leather market as most expensive country to source for international buyers”. 

 

Chairman, PTA appealed to the Prime Minister of Pakistan to look into this serious issue for the proposed increased of Electricity Charges and its collection from 2015 for immediately withdrawal of decision to save the Leather Sector of Pakistan from further collapse.

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