Manend Team 
ISLAMABAD, Jan 24 (SABAH): Former finance minister and Secretary
General Pakistan Muslim League-Nawaz (PML-N) Sindh Dr. Miftah
Ismail Ahmed has said that has said criticised the incumbent
government’s decision to suspend gas supply to domestic industry
from February 1 and export industry from March 1 and further
demanded that the government withdraw a recent hike in the power
tariff. He said that it was strange to suspend gas supply to industries.
“This will cause serious problems for the textile and other sectors,” Dr.
Miftah Ismail said in a video statement on Sunday. The former finance
minister also pointed out that the incumbent government was buying
LNG at expensive rates as it was placing orders late.
“[They] fail to purchase gas and dump the fruits of their incompetence
on the industries,” he said, urging the government to withdraw the
decision. The PML-N leader said the Pakistan Tehreek-e-Insaf (PTI)
government was putting a burden of Rs200 billion on consumers by
raising electricity tariff by a flat Rs1.95. He explained that the price
was being increased as the country’s circular debt has reached its
highest level in history.
“We left circular debt at Rs1,036 billion. Under Imran Khan, the figure
has exceeded Rs2,400 billion and it grows by Rs50 to Rs60 billion per
month due to expensive power generation.”
Miftah Ismail said Prime Minister Imran Khan raised the power tariff
soon after assuming office in an attempt to stop circular debt from
increasing. “Annually, the circular debt is increasing by Rs600 billion
which is mostly due to losses incurred in transmission and distribution
of electricity.”
The former finance minister said the National Electric Power Regulatory
Authority (NEPRA) factors in a loss of 15%. “When the PML-N came to
power, the electricity wastage was recorded at 21%. We reduced it to
18% and now the current government has again raised it to 19%.”
Miftah Ismail added that electricity wastage was costing the national
exchequer a loss of Rs15 billion on average per month. He said the
average collection of electricity bills was 93% during the PML-N tenure
but it dropped to 80% as the country was hit by the coronavirus
pandemic last year. “At present, the electricity bills collection stands at
88%.”
Miftah Ismail argued that the PTI government is not complying with
the NEPRA merit order and a 5% recovery rate was also causing
losses. The PML-N leader said the incumbent government was
generating power from expensive power plants instead of opting for
cheaper options. Criticizing the delay in ordering LNG supply, Miftah
said the PTI government was generating electricity from expensive
sources: furnace oil and diesel.
“Last summer, they generated 280 million units of electricity from
diesel costing Rs18 per unit, and five billion from furnace oil costing
Rs13. One unit of electricity generated from LNG and natural gas costs
about Rs6 or less,” he said. Miftah Ismail said the PML-N generated
more than 11,000 megawatts of electricity and planned to further
increase generation.
“On one hand, the PTI government says there is power surplus and on
the other, they are establishing new power plants,” he said. The
former minister said the PML-N government left power consumption
growing by 10% but the incumbent government has “wrecked the
economy, leading to a decrease in consumption.”
Urging the government to close down 50-year-old power plants
running on furnace oil, Miftah said the commodity benefitted few and
is causing great loss to the country.
Meanwhile in a series of tweets, Dr. Miftah Ismail said that Pakistan
People’s Party (PPP) left exports at $24.8 billion in its last year. In
2013/14, PML-N’s first year, it beat that figure and achieved $25.1
billion. Next year it got just over $24 billion. The year after that was
tough for trade as commodity and oil prices declined and both our
imports and exports declined.
He said that Pakistan’s exports hovered around $22 billion for those
two years only to bounce back to $24.8 billion in PML-N’s last year
2017/18. Dr. Miftah Ismail said that after a huge devaluation and
pontificating about exports for years, PTI managed to decrease exports
in its first year 2018/19 by $500 mil to $24.3 billion.
He said that its export performance was again down in 19/20 to $22.5
billon but of course covid reduced Pak’s exports in the last four
months. He said that in the first half of the current year, exports stand
at $11.8 billion about 5% below last year’s level.
He said that in fact it now seems clear from the overall pattern that
exports this year will be plus/minus 3% of what was achieved by PMLN
in 2017/18. After a 40% devaluation this seem like a very poor
performance. Given the direct cash given to people in America and
monetary easing in Europe, and the difficulties in going to restaurants
and other recreation places, spending in the West on home textiles is
increasing rapidly. But is Pakistan poised to take advantage?
In the last three months as State Bank has revalued the currency from
Rs 168 to a dollar to Rs 160 to a dollar, the federal government has
actually made gas and electricity more expensive. The price of
domestic gas for export industry has increased from Rs 750 to Rs 920
and for local industry it is Rs 1080. He said that Base power tariff have
just been raised by Rs 1.95 per unit and of course we have already get
fuel adjustment charges every quarter.
On top of that the government has announced that it will stop
supplying gas to domestic industry from February 1, and to export
industry from March 1. (Two and six weeks notice only). How will
industry cope remains to be seen but it is likely that these energy
policies will result in disappointing export and LSM figures.
