PALSP urges President Zardari to resolve subsidy crisis impacting Karachi industries

The Pakistan Association of Large Steel Producers (PALSP) has asked President Asif Ali Zardari to step in and address what they see as unfair treatment of Karachi industries.

In a letter to President of Pakistan, PALSP claimed that a subsidy meant to help industries compete has not been given to Karachi businesses under K-Electric (KE), even though industries in other parts of Pakistan have been receiving it since 2021.

The subsidy, intended to support industrial growth, has become a contentious issue, with PALSP alleging that KE has deliberately delayed its implementation through prolonged litigation.

Despite NEPRA ruling in favor of the industries in 2022 and dismissing KE’s appeals in July 2024, the power utility secured a stay order from the Islamabad High Court in August, further stalling the process.

PALSP argues that KE’s actions have effectively blocked the entire PKR 33 billion subsidy, even though only 17% (PKR 5.7 billion) is under dispute, while the remaining 83% (PKR 27.6 billion) is undisputed.

The association has also criticized NEPRA for failing to enforce its own orders and accused the Power Division of mishandling the case in court.

During a recent hearing, a senior ministry official admitted to being unprepared, a move PALSP claims inadvertently helped KE obtain the stay.

The delays have forced Karachi’s industries to operate at higher costs, putting them at a significant disadvantage compared to competitors in other regions who have enjoyed subsidized electricity rates.

In its appeal, PALSP proposed several measures to resolve the crisis, including the immediate release of the undisputed portion of the subsidy, a strict two-week deadline for KE to submit required calculations, and the use of existing government-KE accounting mechanisms to expedite payments.

The association stressed that consumers must receive the subsidy without further delay, as many businesses have already suffered financial losses due to prolonged inflation and currency depreciation.

President’s Secretariat has forwarded PALSP’s petition to the chief secretary of Sindh and relevant federal ministries for review.