KARACHI: The business community has rejected the government’s incremental electricity package and demanded an immediate reduction in interest rates and power tariffs to prevent further industrial shutdowns.
Addressing a press conference on Thursday at the Federation House, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Atif Ikram Sheikh said electricity in Pakistan is the most expensive in the region.
Meanwhile, SM Tanveer, patron-in-chief of the United Business Group (UBG), stated that due to expensive electricity and high interest rates, factories and industrial units across the country are shutting down. So far, 140 textile units and paper mills, along with other factories, have closed, and if the situation continues, more will shut down, increasing unemployment. He said the government is taking decisions regarding electricity and interest rates without consulting the industrial sector, resulting in negative consequences.
SM Tanveer said the transporters’ strike is harming exports and causing losses to the country. He said electricity prices are once again being increased. Currently, the cost is 13 cents per unit, which is about to rise to 15 cents. Despite rising inflation across the country, the interest rate remains excessively high, forcing the government to pay Rs2 trillion annually in debt servicing -- costs which are ultimately being collected through electricity bills. He added that no work has been done on producing electricity through wind and hydel resources. By 2035, an additional 20,000MW will enter the system, raising total capacity to 64,000 MW -- where will this electricity go, he questioned.
Ikram said the national economy is at a difficult crossroads. With such high energy costs, GDP growth is impossible, as Pakistan has the most expensive electricity in the region. He said that in the first five months of fiscal year 2026, the trade deficit has increased by 37 per cent to reach $15 billion.
Atif Ikram Sheikh said Pakistan stands at a critical economic juncture and efforts are being made to revive the economy. Unfortunately, energy prices and interest rates are major problems at the moment. Immediate measures are required. The country’s economic improvement depends on affordable energy, lower interest rates and competitive tax rates.
Saqib Fayyaz Magon, senior vice president of FPCCI, said numerous foreign delegations visit Pakistan with an interest in investing, but they complain about high interest rates, heavy tax burdens and expensive energy tariffs. He said Pakistan has the capacity to keep the wheels of the economy turning.
