KATI urges PM, ministers to resolve industrial power tariff anomoly

KARACHI: The Korangi Association of Trade and Industry (KATI) has urged the prime minister, federal minister for Finance, and federal minister for Power to immediately direct the National Electric Power Regulatory Authority (Nepra) to correct the longstanding anomaly in the B3 and B4 industrial electricity tariff categories.

KATI President Muhammad Ikram Rajput said the current tariff structure contradicts Nepra’s Cost of Service principle, under which electricity tariffs should decrease as supply voltage increases. Instead, industrial consumers in the B3 and B4 categories are being charged significantly above their actual cost of service, placing an unfair financial burden on key manufacturing sectors.

Rajput stated that although B3 and B4 consumers represent only 1.2 percent of Pakistan industrial electricity consumers, they account for 59.3 percent of total industrial electricity consumption. He noted that the existing tariff anomaly imposes an additional burden of nearly Rs 55 billion annually, while the Rs 3.23 per unit PHL surcharge has further increased production costs for industry.

He emphasized that correcting the anomaly would not require any additional government subsidy, as the adjustment could be made on a revenue-neutral basis within the B1 to B4 industrial consumer categories.

Welcoming the recent reduction in industrial electricity tariffs, Rajput said the measure alone is insufficient to restore Pakistan’s competitiveness in international markets. He stressed that the effective industrial electricity tariff must be reduced to below 9 US cents per unit to enable exporters and import-substitution industries to compete with regional economies.

Highlighting the country’s external trade challenges, Rajput pointed out that Pakistan’s imports reached USD 69.6 billion during FY2025–26, while the trade deficit widened to USD 39.47 billion. He said affordable electricity is essential for strengthening domestic manufacturing, increasing exports, reducing import dependence, and supporting sustainable economic growth.

The KATI president urged the prime minister to instruct the Ministry of Energy and Nepra to immediately revise the industrial tariff structure in line with the Cost of Service principle, remove unjustified distribution charges on B3 and B4 consumers, and ensure that industrial electricity tariffs are reduced to internationally competitive levels without delay.

Copyright Business Recorder, 2026