Industrial power tariffs as tool for cross-subsidy: Tanveer says approach eroding industrial competitiveness

LAHORE: FPCCI leader and Patron-in-Chief UBG S M Tanveer has expressed serious concerns over the continued use of industrial electricity tariffs as a tool for cross subsidy, warning that this approach is steadily eroding Pakistan’s industrial competitiveness and export capacity.

He stated that industrial tariffs are currently carrying a cross subsidy burden ranging from Rs 4.5 to Rs 7 per unit, with a total impact of Rs 131 billion, which translates into an additional cost of nearly 20 percent on already expensive electricity. According to him, industry is barely managing to carry its own burden, and this extra cost is pushing many units towards closure or long term contraction.

S M Tanveer pointed out that over the past few years, the number of protected consumers has almost doubled, yet instead of supporting these consumers through fiscal space, the government has chosen the easier route of loading this burden onto industry. He said this policy effectively uses industry as a balancing item for systemic failures, even though industry is the only segment that consistently pays, consumes, and creates employment.

He strongly urged the government and the Minister for Energy Power Division to immediately remove cross subsidy from industrial electricity tariffs and to stop using industry as a substitute for fiscal reform. He stressed that protecting industry is not a concession but an economic necessity.—PR