The Korangi Association of Trade and Industry (KATI) today issued a strong demand for the immediate withdrawal of the recent fuel surcharge recovery from industrial consumers, urging authorities to clear a pending payment of a Rs. 33 billion incremental consumption package from the Covid period.
The demands were put forward by KATI President Muhammad Ikram Rajput during an interactive session with the National Electric Power Regulatory Authority (NEPRA), where he highlighted the immense pressure on Karachi’s industry due to expensive electricity, high gas tariffs, and unstable policies.
Rajput termed the decision by NEPRA and the Power Division to recover Fuel Cost Adjustment (FCA) and Fuel Cost Component (FCC) for the fiscal year 2023-24 as “deeply alarming.” He stated that despite a Multi-Year Tariff (MYT) being in place for K-Electric, the alteration of past decisions and imposition of new financial burdens were creating severe uncertainty in the business community.
He further asserted that it was an “undeniable reality” that Karachi’s industry was being used to subsidize loss-making power distribution companies in other parts of the country, a practice he described as “completely unacceptable.”
In response, NEPRA’s Member Technical (Sindh), Rafiq Ahmed Sheikh, announced that a formal debate would be initiated on the issue of the industrial load factor following a proposal by KATI. He affirmed that efforts were under way to resolve power tariff issues and other challenges confronting the industrial sector.
Sheikh noted that NEPRA’s core objective is to protect the interests of both consumers and the private sector, stating that global best practices support stakeholder representation to ensure greater transparency. He also acknowledged that while stakeholders perform their duties with sincerity, certain systemic flaws require urgent attention.
During the session, KATI’s Deputy Patron-in-Chief Zubair Chhaya emphasized that industrialization is vital for job creation and economic stability but is declining due to some of the highest power tariffs in the region. He pointed out that the textile sector’s exports could rise from $17 billion to $25 billion if competitive energy tariffs were provided.
Rehan Javed, Chairman of KATI’s Standing Committee on NEPRA, identified the tariff structure as a primary issue. He explained that industry operates at a load factor of 16 to 30 percent, yet is being charged on the basis of a 60 percent load factor. He demanded the government fix the load factor at a more realistic 40 percent.
Javed also expressed concern that capacity charges continue to rise despite higher tariffs and increased electricity consumption, stressing that the Ministry of Energy must revise the incremental package to align with actual industrial demand.
The meeting was also attended by senior representatives from the Pakistan Textile Export Association (PTEA), All Pakistan Textile Mills Association (APTMA), and the Karachi Chamber of Commerce and Industry (KCCI), who shared their respective proposals and concerns with the NEPRA official.