Power tariffs for industries: KATI seeks cross-subsidy abolition

KARACHI: President of the Korangi Association of Trade and Industry (KATI), Muhammad Ikram Rajput, has called for the immediate abolition of cross-subsidy embedded in electricity tariffs for industries, stating that the additional cost ranging from Rs4.5 to Rs7 per unit is rendering industrial operations increasingly uncompetitive and financially unviable.

He said the industrial sector is already grappling with high production costs, weak demand, and mounting financial pressures. In such circumstances, the cross-subsidy amounting to nearly a 20 percent additional burden has made it difficult for many industrial units to sustain even routine operations.

Questioning the policy rationale, Rajput said that if, as claimed by the Ministry of Energy, performance in the power sector has improved, it is difficult to understand why a competitive electricity tariff of around 9 cents per unit for industry remains unattainable. “If the sector is indeed stabilised, why are the benefits not being passed directly on to industrial consumers?” he asked.President KATI stressed that without affordable and competitive electricity, neither export growth nor sustainable job creation is possible. He warned that the Prime Minister’s stated objective of boosting exports and ultimately exiting the IMF programme cannot be achieved as long as industry continues to bear the burden of policies unrelated to its actual consumption or performance.

Rajput also expressed concern over the design of the current three-year incremental consumption package. He noted that while the previous winter package offered broad-based relief to industry, the current scheme is restrictive, excluding several industrial units particularly those whose electricity consumption was higher between December 2023 and November 2024.

He further criticised the load factors imposed by the Power Division, stating that there is no clear technical or regulatory justification for applying such benchmarks in a concessional package intended to stimulate electricity demand.

These parameters, he said, appear to have been borrowed from anti-theft and detection billing mechanisms, thereby undermining the effectiveness of the package.

Instead of encouraging additional consumption, the scheme risks merely shifting demand within the industrial sector.

The KATI president urged Federal Minister for Energy (Power Division) Sardar Awais Leghari to immediately remove cross-subsidy from industrial electricity bills and to undertake a comprehensive review of the incremental consumption package so that it genuinely supports increased industrial activity.

He said the future of industry, export competitiveness, and overall economic recovery is directly linked to fair, transparent, and rational electricity pricing.

Copyright Business Recorder, 2026