LCCI demands notification of Rs102 billion cross-subsidy relief

2026-02-02 - 15:06

President of the Lahore Chamber of Commerce and Industry, Faheem ur Rehman Saigol, has lauded abolishing the Rs 102 billion cross-subsidy imposed on the industrial sector. Addressing a press conference on Monday, he demanded the immediate withdrawal of the Rs 90 billion cross-subsidy imposed on traders and commercial consumers. Senior Vice President Tanveer Ahmed Sheikh, Vice President Khurram Lodhi, Executive Committee members Aamir Ali, Rana Shouban Akhtar, Asif Khan, Waqas Aslam, and former Vice Presidents Tahir Manzoor Chaudhry and Mian Zahid Javed were also present. The LCCI President said that the reduction in electricity tariff by Rs4.04 per unit and the abolition of cross-subsidy will help local industry bear competitive pressure arising from the Free Trade Agreement between India and the European Union. He said that a 3 per cent reduction in export refinancing rates and a Rs 4.04 cut in electricity wheeling charges will provide significant relief to exporters and industrial units. He urged the federal government to issue immediate notifications so that industries and businesses can accelerate production without delay. Faheem ur Rehman Saigol said the Rs 90 billion cross-subsidy imposed on traders and the commercial sector has become unbearable. Its removal would reduce the cost of doing business, improve consumers’ purchasing power, help control inflation, stabilise retail prices, and boost overall economic activity. He pointed out that lower inflation would increase spending, enhance business activity, and improve government tax revenues. Commenting on the super tax, he said that its implementation after court decisions may create liquidity issues for major taxpayers. He suggested that the government should collect the super tax in easy instalments to avoid financial stress on the business community. Mr Saigol said that the Rs4.04 per unit reduction in electricity tariff translates into about 1.45 per cent in US dollar terms, which is higher than many regional economies. However, to effectively compete with India, China, Vietnam, and Bangladesh, Pakistan must bring both electricity tariffs and interest rates into single digits. He stressed that exports cannot grow unless energy costs and interest rates for SMEs and large industries are reduced to competitive levels and emphasised the need to provide a level playing field for sustainable industrial growth and job creation. He said Pakistan must shift from expensive oil-based power generation to hydropower. He added that through small dams and water reservoirs, more than 20,000 megawatts of low-cost electricity can be produced. He also expressed concern over capital outflow due to heavy taxation in the real estate sector, noting that $179 billion investment was made in Dubai’s real estate sector in 2025 alone, with a significant portion likely coming from Pakistani investors. He said tax reforms and a business-friendly environment are essential to attract this investment back to Pakistan. Tanveer Ahmed Sheikh and Khurram Lodhi expressed hope that after the completion of the IMF program, the government would have greater flexibility to introduce reforms and that the economy would gradually move toward stability. UHS, Astana University seal pact ahead of Kazakh president’s visit