Industrial Power Tariff Must Fall Below 9 Cents, FPCCI Chief Says
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The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has called on the federal government to reduce industrial electricity tariffs across the board to below 9 US cents per unit, asserting that uniform energy price cuts are critical to enhancing export competitiveness, boosting domestic manufacturing, and curbing import reliance. While FPCCI President Atif Ikram Sheikh acknowledged previous government measures that brought industrial rates down from 16 cents to 12 cents per unit over the last two years, he emphasized that piecemeal relief mechanisms do not offer a sustainable solution for the broader industrial sector. ToU Tariff and Solar Disincentives: The FPCCI voiced concerns over fixed capacity charges under the proposed two-part ToU model, noting that many manufacturing units have already shifted operations to daytime solar power, leaving little flexibility to migrate demand to night-time grid slots.
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged the government to reduce industrial electricity tariffs to below 9 US cents per unit for all industrial consumers, arguing that cheaper power is essential to increase exports, strengthen domestic production and reduce reliance on imports.
FPCCI President Atif Ikram Sheikh acknowledged the government’s efforts to bring industrial electricity rates down from 16 cents to 12 cents per unit over the past two years. However, he said the existing rate and targeted relief schemes would not provide a lasting solution unless lower tariffs were extended uniformly across the industrial sector.
Sheikh welcomed the government’s measures to support industrial electricity consumption, including the Incremental Consumption Package and the proposed optional two-part Time-of-Use (ToU) tariff. He also thanked Prime Minister Shehbaz Sharif and Federal Minister for Power Sardar Awais Ahmad Khan Leghari for their efforts to provide relief to businesses.
Under the incremental consumption scheme, eligible industries receive a concessional rate on electricity consumed above their historical consumption baseline. The proposed two-part ToU arrangement would combine a fixed monthly capacity charge with variable per-unit rates depending on the time electricity is used.
Industry Concerns Over ToU Framework and Solar Grid Shift
However, the FPCCI president raised concerns over the proposed ToU structure, particularly its fixed charges, saying the arrangement may not be commercially workable for industries under current conditions. He also argued that many businesses have already shifted consumption towards daytime and solar-powered hours, leaving limited scope to move additional demand from night-time periods.
Sheikh said solar power remained cheaper than grid electricity under the proposed rates, meaning the tariff structure might not encourage industries to increase their reliance on the national grid or help address fluctuations in electricity demand.
Cross-Subsidies and Economic Impact
He further pointed out that B3 and B4 industrial consumers continue to bear cross-subsidies despite receiving electricity at higher voltage levels, which generally cost less to serve. He called for their tariffs to be reduced alongside those of other industrial consumers, saying a uniform approach could benefit both businesses and the power system.
According to the FPCCI chief, lowering electricity costs would help Pakistani manufacturers compete in international markets, increase industrial output and reduce the need for imported goods. He also maintained that reducing industrial tariffs should be compatible with the government’s economic objectives because stronger production and exports could support economic growth.
