Under relief package, SMEs to pay 50 percent less for power utilization above their November 2019 usage
Prime Minister Imran Khan on Tuesday announced a relief package for small- and medium-sized enterprises (SMEs) under which they will be charged 50 percent less tariffs for power utilization above their November 2019 usage.
The package comes into force from Nov. 1 and would stay in place until June 30, 2021, he said. “So whatever amount of electricity they use in addition to the level they used last November, it will cost [half] of its previous tariff,” he said. “For example, electricity that cost Rs. 16 per unit will now cost Rs. 8.”
He said that the government would observe the response to this and decide whether to extend or modify the relief after June 30, 2021.
Khan said that while this package was focused on SMEs, it would also aid industries in general, as the government was abolishing the concept of “off-peak hours,” when power costs were lower. “All hours will now be charged at off-peak hours,” he said.
Reiterating that Pakistan’s industries had witnessed record-high cement sales after the coronavirus lockdown, as well as high automobile sales, he claimed this showed the construction industry was booming. He did not clarify that this is likely due to the government implementing an amnesty scheme to “whiten” black money by not asking for the provenance of any funds used for the construction sector until Dec. 31, 2020.
Peak and off-peak
Industries Minister Hammad Azhar said the prime minister had directed them to ensure industrialization was facilitated with low input costs to boost production and generate employment. “So we have made a huge decision today, a tough decision, and the cabinet has approved it,” he said, claiming that for the first time in decades there would be no “peak” and “off-peak” hours.
“Industries that make additional use of electricity and fall within the B1, B2 or B3 categories, will get an added 50 percent off per unit until June 30, 2021,” he reiterated the premier’s announcement. “Across the entire industrial sector—which includes B1, B2, B3, B4 and B5 connections—for the next three years, a 25 percent discount will be given for utilizing additional electricity as compared to the same period last year,” he said.
Azhar claimed Pakistan’s economy had witnessed consistent positive growth post-coronavirus, despite the world experiencing negative growth.
Planning Minister Asad Umar, meanwhile, claimed the package announced was the result of months of deliberations. “We now have to ensure that every move we make comes after keeping in view the fact that no one’s employment is affected,” he said, warning that the COVID-19 pandemic should not be allowed to impact the economy.