Karachi: The FPCCI Standing Committee on Energy has called on the government to urgently renegotiate Independent Power Producers (IPP) agreements to salvage the faltering industrial sector. Malik Khuda Bakhsh, Convenor of the Central Standing Committee on Energy, emphasized the necessity for immediate action to adjust the power agreements that are currently threatening the sustainability of industries across Pakistan.

According to Federation of Pakistan Chambers of Commerce and Industry, Malik Khuda Bakhsh, alongside the support from the patron-in-chief of the United Business Group (UBG), S.M. Tanveer, and other FPCCI leaders, underscored the dire situation due to the current electricity tariff structures. These tariffs, significantly influenced by capacity charges levied by IPPs, have reached levels that industries find unsustainable, thus jeopardizing the economic stability of the country.

Bakhsh highlighted the severe impact of high energy prices on all sectors, including commercial, industrial, and domestic spheres. The country is burdened with a staggering payment of 2000 billion rupees in capacity charges annually, for electricity that is not even generated in some cases. These non-operational or underutilized plants are causing a surge in electricity costs that are not only unsustainable but also non-competitive when compared to neighboring countries where industrial power rates are significantly lower.

The urgency to review and possibly audit IPP agreements has been stressed as vital to preventing the closure of existing industrial units and encouraging new investments. The industrial sector, which contributes 60% to the nation's tax revenue, faces imminent risk without substantial reform in energy pricing.