Pakistan’s growing global relevance—especially after its diplomatic role in easing tensions between the US and Iran—has created a window for economic recovery. However, industry leaders warn that skyrocketing energy costs could derail this progress and weaken Pakistan’s industrial future.
Aptma Raises Alarm Over Energy Pricing Crisis
The All Pakistan Textile Mills Association (APTMA), representing the country’s largest export sector, has issued a strong warning to the government.
In a letter to Ali Pervaiz Malik, the association highlighted that domestic energy policies are undermining industrial competitiveness, despite favorable global developments.
Furnace Oil Levy Driving Costs to Record Levels
At the center of the crisis is the massive petroleum levy on furnace oil, which has dramatically increased industrial energy costs.
Key figures:
- Rs80,000 per tonne levy on furnace oil
- Total cost surged to Rs330,000 per tonne
- Backup electricity generation cost: Rs75 per unit
- National grid tariff: around Rs32 per unit
This sharp cost difference has made backup power generation economically unsustainable for industries.
Load Shedding Forcing Costly Alternatives
Frequent industrial load shedding has forced manufacturers to rely on alternative energy sources like furnace oil-based generation.
However:
- Backup systems are now more than twice as expensive
- Industries face production disruptions
- Export orders risk delays and cancellations
Businesses argue they are being penalized for ensuring operational continuity.
Export Sector Under Pressure
Pakistan’s export-oriented industries—especially textiles—are already operating under tight margins. According to Aptma:
- High energy costs create a structural disadvantage
- Regional competitors enjoy cheaper and stable energy
- Profit margins continue to shrink
This directly impacts Pakistan’s ability to compete in global markets and sustain export growth.
Petroleum Levy: Revenue Tool or Industrial Burden?
Industry stakeholders question the logic behind the current levy structure.
Core concerns:
- Originally designed as a revenue generation tool
- Now directly influencing electricity tariffs
- Increasing cost of production across sectors
Businesses argue that imposing such high levies on a backup fuel source lacks economic justification and discourages industrial resilience.
Captive Power Levy Adds to Industry Pain
Beyond furnace oil costs, companies are also facing challenges due to the captive power levy framework.
- Increased operational expenses
- No significant improvement in energy reliability
- Reduced industrial efficiency
This двойная burden is further weakening Pakistan’s manufacturing sector.
پاکستان کے لیے نازک وقت
یہ صورتحال ایسے وقت میں سامنے آئی ہے جب پاکستان کو عالمی سطح پر مثبت توجہ حاصل ہو رہی ہے۔
- Oil prices showing signs of stabilization
- Improved diplomatic positioning
- Opportunity to boost exports and foreign investment
لیکن اگر توانائی کی قیمتیں اسی طرح بڑھتی رہیں تو یہ تمام مواقع ضائع ہو سکتے ہیں۔
Industry Calls for Urgent Policy Reforms
Business leaders are urging the government to take immediate action:
Recommended measures:
- Reduce petroleum levy on furnace oil
- Rationalize energy tariffs
- Ensure consistent electricity supply
- Reform captive power policies
Such steps can help lower production costs and restore industrial confidence.
Economic Impact: What’s at Stake?
If current policies persist, Pakistan may face:
Short-Term Risks:
- Higher inflation
- Reduced industrial output
- Export slowdown
Long-Term Challenges:
- Declining global competitiveness
- Reduced foreign investment
- Slower economic growth
Conclusion: Align Policy with Opportunity
Pakistan stands at a critical crossroads. While diplomatic success and improving global conditions offer hope, domestic energy pricing policies threaten to offset these gains.
To unlock its full economic potential, Pakistan must align internal policies with external opportunities—ensuring that industries are supported, not burdened.
Without timely reforms, the country risks missing a crucial chance to strengthen its industrial base and achieve sustainable growth. The source of this news is Geo.tv
