ISLAMABAD: A Senate Finance Committee subcommittee has recommended an initial 30-minute increase in the country’s business hours, but the Power Division has opposed the move, warning that it would require an additional 600 megawatts of electricity and could increase fuel costs by Rs5 per unit if furnace oil plants are operated.
The recommendation was made during a meeting of the subcommittee of the Senate Standing Committee on Finance and Revenue, chaired by Senator Talha Mahmood, where the issue of restoring business hours to normal levels was discussed.
The business community argued that extending business hours would help revive economic activity and increase government revenues, maintaining that income tax and sales tax collections could only increase when businesses were operating for longer hours.
However, Power Division officials opposed an immediate increase in business hours, citing constraints on electricity and LNG availability.
According to the officials, extending business hours would create an additional electricity requirement of around 600MW. They warned that meeting the additional demand through furnace oil-based power plants would increase the fuel cost of electricity by around Rs5 per unit.
Power Division officials also informed the meeting that the country currently has only one day’s LNG stock. They cautioned that arranging spot LNG cargoes to meet additional power requirements could further increase the cost of electricity.
The conflicting positions highlight the challenge of balancing the government’s efforts to increase economic activity with the availability and cost of electricity required to support longer commercial operating hours.
The subcommittee nevertheless recommended an initial 30-minute increase in business hours as part of a gradual process to bring commercial operating hours back towards normal levels.
The meeting also discussed several broader issues affecting the country’s business and industrial environment, including the relocation of industries from Pakistan, Federal Board of Revenue governance, dual nationality of government officers, industrial policy and measures to facilitate the business community.
The business community has continued to stress the need for policies that allow businesses to operate more effectively and contribute more to tax revenues. During the meeting, its representatives linked longer operating hours with greater commercial activity and consequently higher income and sales tax collections.
The Power Division’s concerns, however, centred on the availability of electricity and the cost of additional generation. With limited LNG stocks and potentially expensive spot LNG purchases, officials indicated that meeting higher electricity demand during extended business hours could place additional pressure on the power sector.
The subcommittee’s recommendation for a phased 30-minute increase therefore seeks to gradually restore business activity while taking into account the power sector’s concerns regarding additional generation requirements and costs.
Tags: Business Hours Pakistan, Senate Finance Committee, Power Division, Electricity Demand, 600MW Power Demand, Furnace Oil, LNG Shortage, Electricity Cost, Business Community, Economic Activity, Tax Revenue, Senator Talha Mahmood, Pakistan Economy