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Karachi: Trade bodies urge govt to make power affordable for the city.

Karachi: Trade bodies urge govt to make power affordable for the city.

Karachi: Trade bodies urge govt to make power affordable for the city.

Karachi: Trade bodies urge govt to make power affordable for the city. (credits: Google)

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  • Representatives of eight trade and industrial associations held a joint press conference.
  • They urged the government to ensure that industries in Karachi have affordable electricity.
  • The SSGC is delivering 100MMCFD of RLNG to K-Electric for the purpose of producing electricity.
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In order to save businesses, export production, and the livelihoods of millions of people, representatives of eight trade and industrialist associations held a joint press conference on Sunday at the Karachi Press Club. They urged the government to act quickly to ensure that industries in Karachi have access to affordable electricity.

The associations urged the federal government to direct the Sui Southern Gas Company (SSGC) to supply domestic gas to K-Electric (KE) at rates authorised by the Oil and Gas Regulatory Authority (OGRA) and to make sure that the natural gas allocation policy was adhered to both literally and figuratively.

They believed that millions of people living in Karachi were being unfairly and discriminatorily treated, which may have a negative impact on the economy and the vast population of the nation.

Both Karachi’s common people and industrialists are finding it more and more difficult to afford electricity. If this inequality is not addressed, it is anticipated that the deteriorating situation may result in unemployment, which could spark social unrest throughout the city.

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Federal B Area Association of Trade and Industry, Bin Qasim Association of Trade and Industry, Surjani Association of Trade and Industry, Pakistan Association of Large Steel Producers, Pakistan Association of Automotive Parts and Accessories Manufacturers, Pakistan Tanners Association, All Karachi Ice Factories Welfare Association, and Sind Paper Mill Forum were among the associations with representatives in attendance.

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It was emphasised during the press conference that starting in September 2021, KE will start adding significant Fuel Charges Adjustments (FCA) to the monthly bills of industrial and residential customers. The FCA is a pass-through expense that is paid for by end users throughout the city and takes variable fuel prices into consideration.

They observed that because RLNG rather than local gas was being used to produce energy, the overall cost of electricity had risen above what Karachi’s consumers can pay. It was stated that the 25 million citizens and 40,000 industries of Karachi are paying high electrical unit costs as a result of the breach of the gas supply priority list.

The SSGC is currently delivering 100MMCFD of RLNG to K-Electric for the purpose of producing electricity, which represents a flagrant breach of the decision made by the federal cabinet committee on energy in 2018 under the leadership of Shahid Khaqan Abbasi.

The gas utility was told during the committee’s ruling to give KE at least 130MMCFD of natural gas. The SSGC is currently supplying gas at RLNG pricing, which have escalated by 5 times over the last few months, in sharp contrast to the decision, forcing KE to create expensive energy. Higher electricity costs are the result, which are becoming an intolerable burden for customers.

K-Electric recently filed a petition for an FCA of Rs11.33/KWH for the month of May 2022, which is anticipated to appear in the August 2022 bills. The cost of electricity per unit for consumers is anticipated to reach around Rs48/unit due to the government’s base tariff increase for the upcoming fiscal year and skyrocketing FCAs. This is intolerable for residential consumers and will significantly raise the cost of doing business for industrialists.

Unexpectedly, the SSGC still gives captive power plants priority over the rest of the power industry, with K-Electric disobeying the natural gas allocation and management policy.

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Currently, 200 MMCFD of natural gas is provided to captive power plants, which produce electricity at rates of Rs. 13 per kWh and Rs. 11 per kWh, respectively, and are charged Rs. 1087 per MMBTU for zero-rated export businesses and Rs. 852 per MMBTU.

However, instead of natural gas, KE is being given 100MMCFD RLNG at a cost of Rs4,656/MMBTU, forcing the company to create power at an exorbitant price that will have an impact on 25 million city inhabitants and 40,000 businesses.

According to the gas supply priority list and Article 158 of the Constitution, Karachi residents have a right to natural gas that has been approved by the Ogra at a rate of Rs857/MMBTU that will be given to the Karachi-based power plants that generate energy for them.

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