Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain said on Friday that the rising prices of electricity and gas have become a big threat to the people and the economy.
If energy prices continue to rise, thousands of businesses will close, exports will plummet, and millions of people will be unemployed, he said.
Mian Zahid Hussain said that the energy sector has become a major threat to the economy. This sector is facing 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, due to which the government needs to install power plants with a capacity of 27 thousand megawatts, he said.
The business leader said that consumers have to pay an extra 800 billion rupees annually for new power plants to satisfy the increasing need.
He observed that there is a need for reforms in this sector, which will result in making power cheaper by eliminating power losses and capacity payments so as to boost industry, 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 bring the situation under control, but to no avail.
Mian Zahid Hussain said that the first assurance of the elimination of 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 before the previous government, the volume of central government revenue was greater than the amount of loans and interest payments, but during that government, the volume of loans and interest payments was also greater than the total revenue.
The government does not have the resources to make the country a modern or welfare state as it is unable to ensure survival, and if there is a delay in obtaining loans, then big problems will arise.
He said that rising government expenditure, imports, circular credit, unemployment, inflation, and declining exports, remittances, revenue, and employment are rapidly pushing Pakistan towards crisis.
If instead of fixing the losses through reforms, shortcuts are taken to raise rates, it will bury us. 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.