KARACHI: Atif Ikram Sheikh, President FPCCI, has called for the immediate correction of industrial electricity tariffs by demanding the removal of cross subsidies; Power Holding Limited (PHL) surcharge and a rational redesign of peak-hour (Time-of-Day) electricity charges, which are placing an unsustainable burden on Pakistan’s industrial and export sectors.
Sheikh stated that industrial electricity tariffs have drifted far away from cost-reflective principles. Instead of reflecting the actual cost of power supply, tariffs have become layered with non-energy charges that inflate production costs and weaken competitiveness.
He elaborated that industries are currently bearing a cross-subsidy burden ranging between Rs. 4 to Rs. 7 per unit, in addition to a PHL surcharge of Rs. 3.23 per unit, both of which have no linkage with the real cost of electricity consumed.
He clarified that the PHL surcharge is effectively an additional cross subsidy, regardless of the accounting or recovery mechanism used. From an industrial perspective, any charge recovered through the electricity bill is a direct cost of production. These costs cannot be absorbed by industry, nor can they be passed on in competitive domestic and export markets, he added.
FPCCI highlighted that industrial consumers are the most disciplined and efficient segment of the power system, with near-100 percent bill recovery, minimal technical losses due to high-voltage connections, and predictable consumption patterns.
Despite this, industry continues to finance inefficiencies and structural issues that originate elsewhere in the system.
FPCCI Chief categorically rejected peak-hour (Time-of-Day) electricity pricing, stating that it must be abolished. Any peak pricing that does not reduce the 24-hour average cost is unacceptable and functions solely as a penalty on industry. The Federation asserted that only off-peak pricing incentives should be enforced, with no increase in overall electricity cost.
Sheikh warned that the current structure of peak-hour charges discourages continuous industrial operations, disrupts production planning, and pushes industries toward loss. This weakens grid demand, increases stranded capacity costs, and ultimately raises tariffs for all consumers.
FPCCI emphasised that a stable, competitive industrial economy requires electricity pricing that is predictable, transparent, and strictly cost-reflective. Penal charges and artificial tariff distortions undermine investment confidence and contradict the objective of promoting exports and documented, grid-based industrial growth.
In view of the above, FPCCI demands the immediate removal of cross subsidies from industrial electricity tariffs, withdrawal of the PHL surcharge for industrial consumers, and a rational redesign of peak-hour electricity charges based on genuine cost rebalancing rather than revenue extraction.
Sheikh concluded that industry cannot continue to function as the shock absorber for power-sector inefficiencies, and urgent tariff correction is no longer optional but necessary.
Copyright Business Recorder, 2026
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