ISLAMABAD: Prime Minister Shehbaz Sharif on Friday announced a Rs4.4 ($0.014) cut in electricity tariffs for industrial consumers, saying the move is aimed at lowering production costs and spurring economic activity in Pakistan.

Manufacturers in Pakistan have long complained of high electricity price, i.e. Rs22.98 per unit, for industrial consumers, arguing that it has dampened industrial growth and made local products less competitive globally.

The reduction in power tariffs for industries is expected to lower production costs that will allow exporters to offer more competitive prices in international markets and increase profit margins through higher capacity utilization.

Addressing businessmen and exporters at a ceremony in Islamabad, Sharif said there was no alternative to export-driven economic growth and his government will devise all future economic policies in consultation with them.

“Four rupees and four paisas per unit are being reduced in electricity tariffs for industry,” the prime minister announced at the ceremony. “If it were up to me, I would reduce it by another 10 rupees, but my hands are tied.”

The development comes as Pakistan, which has long struggled with boom-bust cycles, seeks to boost foreign investment and increase exports as it navigates a long path to economic recovery under a $7 billion International Monetary Fund (IMF) program.

The prime minister said they have reduced the export refinance rate from 7.5 percent to 4.5 percent.

“I believe this is a very significant facility being extended to you,” he said. “God willing, it will help Pakistan’s exports rebound and it will certainly be of immense benefit, especially to those who need financing.”

During his address, Sharif also announced lowering wheeling charges for industries by Rs9 ($0.032) per unit, noting the country’s economy had stabilized, inflation had come down to single digits and the policy rate stood at 10.5 percent.

In Pakistan, wheeling charges refer to fees paid by electricity consumers and generators to use the national grid’s transmission and distribution network to move electricity from suppliers to end-users under the Competitive Trading Bilateral Contracts Market (CTBCM).

“I think this should help you sell your power to neighboring industries,” he told businesspersons at the event.