Industrial bodies urge govt to revise power package for fairer tariffs

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI), along with the Korangi Association of Trade and Industry (KATI) and the Bin Qasim Association of Trade and Industry (BQATI), has called on the government to revisit the proposed power incremental package, warning that the current design could hinder rather than help industrial recovery.

According to Business Recorder, the National Electric Power Regulatory Authority (Nepra) is scheduled to hold a public hearing on the plan on November 11, which has already received approval from the federal cabinet. The business groups have urged Nepra to lower the incremental tariff from Rs22.98 per unit to Rs16 per unit to make it genuinely beneficial for industries.

Industry says cross-subsidies hurting competitiveness

In letters submitted to Nepra, the FPCCI noted that while the government aims to reduce subsidy requirements by up to Rs300 billion, industries still bear a heavy cross-subsidy burden of about Rs131 billion, as per Nepra’s own data. The chamber argued that if there is fiscal space, it should be used to reduce this imbalance instead of continuing to make industries pay more than their cost of service.

“Industrial tariffs have climbed from around Rs34 to nearly Rs38 per unit due to various adjustments,” the FPCCI said. “At this level, a fixed incremental rate of Rs22.98/kWh offers only limited relief.”

Proposal for simplified, fairer benchmarking

The FPCCI suggested a simpler three-year weighted average method to determine baselines, using 50 percent from FY2024–25, 30 percent from FY2023–24, and 20 percent from FY2022–23. This, it said, would ensure fairness for all industrial categories, including those shifting from captive to grid power after gas levies.

The chamber argued that the current benchmark rules and fixed reference period unfairly penalise efficient factories that used more power last year while rewarding those that underperformed.

It also proposed that new industrial connections without prior consumption be assigned a 50 percent load factor to maintain parity across sectors.

The FPCCI warned that if the package is implemented without these corrections, it may fail to generate the desired rise in industrial demand or revenue. It urged Nepra and the Power Division to adopt a transparent, data-driven approach that aligns with ground realities and supports long-term industrial growth.