
KARACHI: The recent hike in the power tariff under the head of fuel price adjustment is forcing the marble industry of Khyber-Pakhtunkhwa (KP) to halt its production.
The Buner Marble Association (BMA) on February 1, announced to go on a strike, demanding withdrawal of the additional taxes and fuel price adjustment charges in the power utility bill.
According to the association, there are more than 4,000 marble factories in the province, including 44 in Swat and around 500 in Buner. There are up to one million workers associated with the industry.
The association after staging a protest for around three weeks temporarily ended the strike and decided to start load-in and load-out of the products present at the factories, while announcing for the factories to start processing and production from March 1.
The factories, which process raw materials to produce the end products mostly rely on the Peshawar Electric Supply Company (Pesco) for power, while the electricity bill accounts for around 30 per cent of these factories’ cost of production, which has now gone up to around 45 per cent, according to an official of the Buner Marble Association.
A report of the Federal Bureau of Revenue (FBR) showed that there are 160 million tonnes of marble reserves in the country, of which 158 million tonnes are in KP alone, while around half of the marble reserves of KP are in Buner district.
Declaring the imposition of additional tariffs under the head of the fuel price adjustment as an extortion and unlawful tax, Senator Mushtaq Ahmed Khan had said: “The authorities collected around Rs60 billion from the consumers in December 2021, Rs36 billion in January this year and plans are afoot to collect an additional Rs30 billion in February bill under the fuel price adjustment charges.”
“KP generates more than 5,000MW of hydel power, of which 17 per cent was agreed to be given to the province, but the authorities have failed to comply with the agreement and the province, whose demand is lower than 2,000MW, is deprived of the electricity it generates,” he added.
Saeed Ullah Khan, a marble industry businessman in Nanser, Buner district said: “The electricity bill of the factories is forcing the owners to halt operations, as they are paying almost double the original bill of the electricity consumption. The marble processing factories are bearing a monthly loss of around Rs100,000, as their cost of production depends on the electricity tariffs.”
“We are not able to start our machineries on the concerns of rising production costs, and if we hike the prices of the end product, it will resultantly affect the sales and profit,” he added.
“We are deprived of the electricity we produce at the lowest prices. The province generates per unit of electricity on the price of around Rs3 but we are provided electricity on the price of energy generated from fossil fuels.”
“The ordinary price per unit is around Rs17 and with the load factor provided to the factories reaching around Rs28/unit from Buner and Rs45/unit from Mardan,” Khan added.
The factories are being charged additional taxes under the guise of fuel adjustment, quarter tariff, sales tax, withholding tax, general sales tax and further taxes, while the government is doing little to nothing for provision of relief to the industry, which employs around one million people in the province.
Ahmed Zeb, a marble processing factory owner, said: “The government is levying more than 50 per cent taxes under the head of the fuel price adjustment, sales tax and others, which is drastically affecting the sales and income.”
“The increase in the electricity bill, which accounts for around 30 per cent of the cost of production, will resultantly reduce the sales, as we will be forced to hike prices of the end product.”
“The factories that used to generate a monthly income of around Rs200,000, have come to the level where they are forced to pay electricity bills from their pockets as all the revenues are spent on the utility bills and wages to the labourers,” he added.
Abid Ali, a commission agent at a marble mine, while expressing his dismay over the current fuel price adjustment in the February bill, said that talks are in progress to further increase the tariff by over Rs6/unit for the month of January to be adjusted at a later month.
“The marble sector is staging protests over the recent hike in the utility bills, demanding reduction in taxes, while, at the same time, the authorities are getting ready for a further hike in the electricity bill,” he added.
“This phenomenon is unbelievable, as we see the governments around the world provide subsidies and tax exemptions to the production and export-oriented industries, but in Pakistan, it is otherwise,” Ali added.
The KP government in 2020 allocated Rs800 million in the Annual Development Programme for the fiscal year 2021 to establish a marble industrial estate in Buner.
A sum of Rs800 million was to be used to purchase land for the marble industrial estate in the district.
Buner district currently houses 350 marble factories and contributes 60 per cent to the total marble production in the country. However, despite such a large quantum of production, the district lacks an industrial zone, which leads to lower production levels and harm the environment.
At present, marble factories are able to run their operations for around eight hours in a day due to prolonged electricity outages, which reduces marble supply and leads to unemployment.
However, the marble factories located in the industrial estates can be operational 24 hours, which is expected to increase the supply and create additional jobs.
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