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A Brief Over-view of Generator Market in Pakistan

Pakistan is inflicted by a perennial energy crisis; which is not only hampering its economical development, but is also accruing social costs. Since the national power grid is unable to supply the energy demand; households and businesses are increasingly adopting alternative energy sources. This has resulted in a high demand for imported generators in Pakistani. More than 75 to 80 per- cent electricity generators imported from China by in Pakistan are finding their way either in Punjab market or rural Sindh where prolonged hours of load-shedding has vastly pushed their demands up during the summer months Compared to few years ago, the menace of power outages has assumed critical dimensions in major towns and cities of Pakistan, where load-shedding has stretched to almost 12 to 15 hours a day. The high demand of the generators have caused price spiral of up to 25% on account of demand and supply gap. In the wake of enhanced demand of generators retailers, wholesalers and traders are finding it difficult to fulfil their growing demand, which is causing upsurge in the rates of available machinery. Levying of 19 percent sales tax by the federal government from previous financial year, has resulted in further escalation in prices of all varieties of generators available in the market. Khurrum Saigal, President of Pakistan Machinery Merchant Group, admitted that enhanced sales of generators have not only caused their shortages but also resulting in increase in prices causing financial hardship to buyers majority of whom come from lower or

middle income groups of the population. Citing instances in this regard, he informed that a 1KV generator of Chinese origin, which was available last year at Rs 8,000, is now priced at Rs 12,000 mainly due to scarcity in the market. Similarly, a 2KV of electricity generator is now sold in the market at Rs 15,000 to Rs 18,000 compared to previous years rates of Rs 12,000. Identifying other major factors causing shortage of the generators, he said that delayed Custom clearance of generators has emerged as the main problem towards normal supply of the machinery in the market. Market analysis show that, the imported generator market is likely to stay robust in the short and medium term, due to prevailing power deficiency in the country.