KARACHI, Nov 22: President Asif Ali Zardari has said that the government is carefully examining the possibility of reduction in power tariff and mark-up rates to control the cost of production.

Besides, efforts are being made to improve law and order situation in Karachi, in particular, and the country, in general.

Talking to a delegation of Karachi Chamber of Commerce and Industry (KCCI) on Friday, the president further highlighted the key features of the political situation in the country, and spoke about the measures being taken to create an atmosphere of goodwill and reconciliation.

He also advised to engage all energies and resources for the betterment of economic conditions, says a press release of the KCCI.

The businessmen informed the president that industries consume 40 per cent gas and are burdened with a huge cost of cross-subsidies provided to domestic and fertiliser industries, Pakistan’s industry is paying 150 per cent higher tariff compared to Bangladesh.

The president instantly directed Dr Asim Hussain, Advisor to Prime Minister for Ministry of Petroleum and Natural Resources and Mr Shaukat Tarin, Advisor for Finance, to resolve this mater amicably by holding meetings with stakeholders.

He specifically emphasised for removal of cross-subsidy existing in the tariff of gas and electricity.

Shaukat Tarin invited Mr Zubair Motiwala and others for deliberations on the subject. However, the advisor on finance clarified that he understands the impact of cross-subsidy on industry, its viability and that compatibility is in great danger.

He promised to help the industry and to make it viable. Businessmen pointed out that rates of gas supplies to fertiliser industries were never raised whenever tariff was revised.

Monetary policy also came under discussion with the president regarding high rates of interest on bank loans affecting the operational costs of production, resulting in a decline in exports and inability to accept future orders, Rupee devaluation affecting export business against purchase of raw material in US dollar at higher rate, Governor, State Bank’s announcement of increase in discount rates. It was assured that this would not affect Kibor rates, but today banks are demanding five per cent over Kibor that means 20 per cent interest rates.

It was stated that subsidies have been withdrawn by the government whereas China, major competitor in the world market, has enhanced incentives from 13 to 14 per cent from Nov 1 on textiles declaring the sector as most labour-oriented and to overcome the trade deficit.

A proposal was made to provide incentives to overseas Pakistanis for bringing money into Pakistan.

Regarding electricity, the delegation apprised the president that during the course of a recent meeting with Minister of Power, Advisor on Finance, Special Assistant on Finance in Islamabad consensus was reached on the points that increase in power tariff would not affect consumers using 300 units, and that Withholding Tax, Sales Tax, TV License Fee would be abolished for both domestic and commercial consumers, new tariff calculation based on current furnace oil prices would be initiated. A benchmark of transmission and distribution (T&D) losses would be determined and any raise in future will be limited to it.

The delegation was led by Siraj Kassam Teli, chairman Businessmen Group (BMG) of KCCI, Tahir Khaliq, M Zubair Motiwala, Anjum Nisar, President-KCCI, M Jawed Bilwani, Senior Vice President of KCCI, Mohammad Ali, Vice President of KCCI, along with other leading businessmen.