ISLAMABAD: All Pakistan Textile Mills Association (APTMA) has sought clarification from the Power Division regarding recent reduction in electricity tariff structure for the industry.
According to APTMA’s calculations, the applicable B-3 industrial tariff for the month of March 2025 stood at Rs34.24/ kWh (equivalent) to Cents 12.27/kWh).
The details of new tariff industrial tariff structure are as follows for March 2025: off peak- Rs29.39/kWh, peak- Rs37.87/ kWh, weighted average- Rs30.80/kWh, QTA- Rs 0, FPA – negative 2.00/ kWh, fixed charges –Rs 1.90/kWh, ED@ 1 per cent- Rs 0.31/kWh, FC Surcharge- Rs 3.23/kWh. The total revised industrial tariff is Rs 34.24/kWh which is equal to Cents 12.27/ kWh.
Businesses underscore need for further cut in power tariffs
The APTMA is of the view that FPA assumed based on previous month’s trends and fixed charge based on mean consumption at 90 per cent of MDI.
The APTMA is of the view that pursuant to the prime minister’s announcement indicating a reduction of Rs 7.59/Kwh power tariffs for industrial consumers effective April 2025, this translates to a revised tariff of Rs 26.65/kWh (Cents 9.55/kWh).
“We request confirmation as to whether our understanding is correct. So that our member mills may factor this revised cost structure into pricing strategies and export orders,” said Kamran Arshad, chairman APTMA, in letter to the power minister.
The association has opined that the revised tariff of Cents 9.55/kWh places Pakistan’s industrial power cost within regionally competitive range, which is remarkable achievement, adding that this will textile industry to compete effectively in global markets and significantly enhance its contribution to the country’s export-led growth strategy.
Last week, Chairman NEPRA Waseem Mukhtar said that the full implementation of decision regarding reduction in tariff by Rs7.41 per unit for domestic consumers and Rs 5.69 per unit for industry will take time.
The NEPRA chairman stated that the process to implement the prime minister’s announcement has started and reduction will begin after a couple of days, as three determinations — FCA, QTA, and a special Prior Year Adjustment (PYA) of Rs23 billion (Rs 0.90 per unit) — were released on April 3, 2025. The impact of these adjustments was Rs 5.02 per unit.
According to Additional Secretary of the Power Division Mehfooz Bhatti, out of the Rs7.41 per unit relief for domestic consumers and Rs7.69 per unit for industries, Rs5.97 per unit is the tariff reduction, while the remainder is related to taxes on petroleum products.
It is still unclear that whether the government has included the Re1 per unit levy to be collected through the charge on CPPs, as this matter is pending before the Islamabad High Court (IHC).
The sources said that Task Force on Energy also held a meeting on Monday to discuss implications of tariff reduction on different categories of consumers.
Minister for Power Sardar Owais Ahmed Khan Leghari faced tough questions from journalists last Friday.
One journalist pointed out the confusion among consumers, particularly within the business community and industry, about the reduction in electricity tariffs. It seemed that the government might have misled them, and the relief could be temporary.
The minister replied that this relief is intended to be sustainable. However, he clarified that if hydropower generation declines, interest rates rise, or international energy prices increase, the government may not be able to prevent a rise in electricity prices, as these factors are beyond the government’s control.
The federal minister also mentioned that the government might further reduce electricity prices during the annual rebasing of electricity tariffs, which is scheduled for June 2025.
Copyright Business Recorder, 2025
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