BMP slams proposed ‘incremental power consumption’ package

LAHORE: Chairman Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel (BMP) Mian Anjum Nisar has come down hard on the government’s proposed “incremental power consumption” package, saying the plan is inadequate, poorly designed, and unlikely to revive Pakistan’s struggling industrial sector.

He said that the policy reflects a lack of understanding of ground realities and fails to address the structural issues that have made the country’s power tariffs among the highest in the region.

His remarks came after the Power Division presented its proposal before the National Electric Power Regulatory Authority (Nepra), seeking an urgent approval of a special discounted electricity rate of Rs 22.98 per unit for incremental industrial consumption. The government claims that this package, which also covers private agricultural consumers, will encourage higher energy use, stimulate industrial growth, and stabilise the national grid without any fiscal burden on the exchequer.

However, he rejected these arguments outright. He said that when industries are already paying Rs 34 to Rs 38 per unit — among the highest in Asia — offering a discounted rate only on additional usage would have no meaningful effect. “This is not relief; it’s an illusion,” he remarked.

“If the government truly wants to revive manufacturing and exports, it must bring down the base tariff for industrial consumers to single-digit cents, not design complex schemes that offer symbolic discounts.”

Anjum Nisar pointed out that Pakistan’s industrial sector has been under severe stress for years, with rising energy prices, excessive taxation, and unpredictable policies pushing many units to shut down or relocate abroad.

“Our regional competitors — Bangladesh, Vietnam, and India — offer electricity between 4 and 9 cents per unit. How can Pakistani exporters survive in global markets when we are forced to pay nearly four times that cost?” he questioned.

He emphasised that high power tariffs are not just an industrial issue but a national economic concern.

“Expensive energy directly translates into inflation, unemployment, and reduced export competitiveness,” he said.

“Without affordable and reliable power, no incentive, subsidy, or special package can save the manufacturing sector.”

The FPCCI’s BMP Chief further criticised the Power Division’s attempt to fast-track the package’s approval without proper consultation.

He also expressed concern over the government’s tendency to announce schemes without coordination between federal and provincial authorities.

“Even now, there are conflicting solar and renewable energy policies in Punjab and at the federal level. This lack of alignment discourages investment and confuses industrial consumers,” he said.

Highlighting the decline in industrial and agricultural electricity consumption, Nisar said the data reflects a deeper crisis. According to the Power Division’s own figures, industrial demand has contracted by 14 percent while agricultural demand has dropped by 47 percent due to macroeconomic pressures and the growing shift towards solar and captive generation.

“These are alarming numbers,” he said. “They show that industries are moving off-grid not by choice but by necessity. They simply cannot afford grid electricity anymore.”

He added that such behaviour undermines the sustainability of the national grid. “When paying consumers leave the grid, the entire cost burden shifts to the remaining users, further increasing tariffs. This vicious cycle will continue unless reforms make the system competitive again,” he explained.

Anjum Nisar urged the government to eliminate cross-subsidies that unfairly penalise industries.

“Industrial consumers are forced to pay for inefficiencies and subsidies for other sectors. This is not sustainable. Cross-subsidisation has distorted the entire tariff regime,” he said.

Copyright Business Recorder, 2025