Chairman of Pakistan Tanners Association (Southern Zone), Karachi, Mr Muhammad Shafi, has noticed an increase in electricity prices of another Rs 2.56/unit for August 2024, as stated by NEPRA earlier this week. He noted that the industry is already suffering a lot due to excessive increases in electricity prices in the past year, resulting in the cost of electricity, gas prices and also taxation for the export-related leather sector, especially after the Budget 2024-2025 presented in June.

He urged the Government to review its contracts with the IPPs, which are also in demand by the FPCCI. A few IPPs are making a lot of money due to IPP-favoured agreements from the past, but the general public and industry at large are suffering from these contracts. He expressed his deep concern that it would be too late if the Government did not take timely steps. The leather sector will lose its potential and its export orders, for which we strongly fear/apprehend that the export orders could be diverted to the neighbour competitors like India, Bangladesh, Turkey, & china, with the lowest cost of production & other utilities at reduced prices offering by their Government to the Leather Industries at destinations, which would ultimately be the loss of country and the Leather Industry of Pakistan as well.

The leather industry of Pakistan is already reeling from the severe impact of high utility tariffs. These tariffs significantly inflate the cost of doing business in Pakistan, making it more expensive than in our neighbouring countries. This has led to the industry facing severe difficulties securing export orders for finished leather and other commodities from the international market.