Government’s decision to raise Electricity Charges extremely detrimental for Exports Industry: Chairman, Pakistan Tanners Association

Mr. Anjum Zafar Chairman, Pakistan Tanners Association (PTA) in an exclusive press statement issued today to all country wide print & electronic media has strongly condemned the irrational & illogical increase of Electricity Charges Rs.3.90 per unit and effective for collection from 2015 in Pakistan saying that this decision would be last nail in coffin for export industries specially Leather Sector of Pakistan.   

The Chairman, PTA, Mr. Anjum Zafar also shared Pakistan Leather Sector, which is responsible for second highest exports from Pakistan is and has been contributing significantly to country’s GDP. The industry is already in severe clutches of problems and grievances. Meanwhile, the cost of doing business in Pakistan is already exorbitantly high. Our member exporters are already unable to compete in international market as it is, adding to that the regional competitors particularly China, India & Bangladesh the situation has been quite impossible for the industry to survive in such conditions. The sudden increase in electricity charges would render our member exporters out of the competition. International market for Leather in the wake of very high and ever increasing cost of doing business in Pakistan and the unavailability of utility coupled with high electricity charges is one of the primary reasons behind it. 

Mr. Anjum Zafar, Chairman, PTA also shared the cost of utilities charges in comparison with regional competitors as appended below. Pakistan is already on much higher side and the 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 International markets and ultimately declining the export of leather sector pushing the industry to brink of extinction.

Regional Comparison of Cost of doing Business:

 

Inputs

 

Pakistan

 

Bangladesh

Pak % higher than Bangla

 

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 the proposed increase of Electricity charges in Pakistan in general and collection from 2015 in particular, which would be the highly detrimental for Leather Sector of Pakistan and it is becoming impossible with the recent hike in 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 which was not calculated in prices when the products were sold? Questioning the retrospective nature of raises, the Chairman said that nowhere else in world are prices for utilities increased with retrospective effect, we only such illogical and irrational being taken in Pakistan who is already suffering from declining export volumes. Moreover, this increase in utilities will render Pakistan out of leather market in the international markets.

Furthermore, he said that, “I, being the Chairman, PTA on behalf of all Leather Sector of Pakistan appeal 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 immediate withdrawal of decision to save the Leather Sector of Pakistan from further collapse.”

 

Posted on: 2017-09-22T16:21:00+05:00