ISLAMABAD: Power Division said on Wednesday said that the industrial cross-subsidy burden has been reduced from Rs 225 billion (Rs 8.9 per unit) in March 2024, when the current government took charge, to currently at Rs 102 billion (Rs 4.02 per unit), which represents substantial reduction of Rs 123 billion.
Industrial tariff (including tax) declined from Rs 62.99/kWh (Mar-2024) to Rs 46.31 (Dec-2025), while the national average tariff reduced from Rs 53.04 to Rs 42.27/kWh.
Former caretaker Commerce minister, Gohar Ijaz had lamented Pakistan’s industrial sector being pushed to the brink by an unjust electricity pricing regime that forces industry to bankroll government failures in the power sector.
He argued that the government is not paying its share, so industry is being forced to subsidise other consumer categories which made Pakistani industry uncompetitive, both regionally and globally.
READ MORE: Industrial, export-oriented consumers: Imposition of Rs130bn cross-subsidy opposed
One of the textile sector entrepreneurs, Aamir Sheikh said that B3 tariff was Rs 33.26/kWh including Rs 9.07/kWh fuel and now it is Rs 33.26/kWh including Rs 7.74/kWh fuel. It means variable has been increased and since fuel will be billed at actual through FPA, in effect tariff has increased by Rs 1.34/kWh.
According to Power Division, to reduce electricity tariffs, the government has terminated inefficient power plants and successfully renegotiated contracts with Power Producers (IPPs).
These actions have resulted in tariff reductions, and further negotiations with remaining Power Producers are in progress. The government has also offered a surplus power package, allowing industrial and agricultural consumers to avail additional electricity at a reduced rate of Rs 22.98 per unit for three years, helping to reduce average industrial tariffs.
Additionally, the government has launched a Circular Debt Management Plan (CDMP) to eliminate outstanding debt within 5–6 years. Once cleared, the debt surcharge currently charged at Rs 3.23 per unit will be removed, providing further tariff relief to consumers.
Power Division maintains that off-grid solar consumers have distorted the subsidies requirement, doubling protected consumers from 11 million in 2021 to 22 million recently, due to hybrid consumption strategies. This not only strained the fiscal resources but also increased the burden via cross-subsidies to industrial and commercial users, eroding their competitiveness.
The cross-subsidy paid by commercial, bulk and higher consuming domestic consumers is far above the level of cross-subsidy being paid by industry.
“Although the tariffs reflect government’s broader socio-economic policy, not merely the recovery mechanism, the Government is exploring various other options to further reduce the cross-subsidy burden from industrial consumers, including subsidy reforms and debt refinancing, in addition to the above tariff reduction measures already in place,” said Power Division.
Copyright Business Recorder, 2026
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