The head of a prominent industrial association today called for the immediate abolition of a cross-subsidy in electricity tariffs, warning that the surcharge is rendering industrial operations financially unviable and uncompetitive.
Muhammad Ikram Rajput, President of the Korangi Association of Trade and Industry (KATI), stated that an additional cost ranging from Rs4.5 to Rs7 per unit is being levied on industrial consumers.
He argued that this cross-subsidy represents nearly a 20 percent additional burden on a sector already struggling with high production costs, weak market demand, and significant financial pressures, making it difficult for many units to sustain even routine operations.
Rajput questioned the policy”s rationale, challenging claims from the Ministry of Energy regarding improvements in the power sector. ‘If the sector is indeed stabilised, why are the benefits not being passed directly on to industrial consumers?’ he asked, pointing out that a competitive tariff of around 9 cents per unit remains unattainable.
The KATI President stressed that national economic goals, including the Prime Minister’s objective to boost exports and exit the IMF programme, cannot be achieved while industry bears the burden of policies disconnected from its actual consumption. He contended that without affordable electricity, neither export growth nor sustainable job creation is possible.
Concerns were also raised about the design of the government”s current three-year incremental consumption package. Rajput noted that the scheme is restrictive, excluding several industrial units, particularly those whose electricity usage was higher between December 2023 and November 2024, unlike a more broad-based previous winter package.
He further criticised the load factors imposed by the Power Division within the package, asserting there is no clear technical or regulatory justification for their inclusion. Rajput suggested these parameters appear to be borrowed from anti-theft mechanisms and undermine the incentive”s effectiveness, risking a shift in demand rather than stimulating new consumption.
In a direct appeal, the KATI president urged the Federal Minister for Energy (Power Division), Sardar Awais Leghari, to remove the cross-subsidy from industrial power bills and to initiate a comprehensive review of the incremental consumption package to ensure it genuinely supports increased industrial activity.
He concluded that the future of Pakistan’s industry, export competitiveness, and overall economic recovery is directly linked to the implementation of fair, transparent, and rational electricity pricing.