The Federation of Pakistan Chambers of Commerce & Industry (FPCCI), Korangi Association of Trade & Industry (KATI), and Bin Qasim Association of Trade & Industry (BQATI) have urged the government to revise the Prime Minister’s proposed Incremental Power Package by reducing the incremental tariff from Rs 22.98 per unit to Rs 16 per unit. NEPRA (National Electric Power Regulatory Authority) will hold a public hearing on this package on Tuesday, November 11, which has already been approved by the federal cabinet.
According to sources, the FPCCI and other trade bodies stated in separate letters to NEPRA’s Registrar that while the Power Division’s plan aims to reduce tariffs for the industrial and agricultural sectors, a transparent and fair mechanism is essential during implementation.
The FPCCI noted that the proposed package could reduce subsidy requirements by up to Rs 300 billion, yet industries are still burdened by a cross-subsidy of Rs 131 billion, as per NEPRA’s own calculations. The federation argued that if fiscal space has been created, it should be used to eliminate inequities, especially since a large portion of solar and protected consumers have already moved outside the general tariff structure—leaving industries to pay far more than their fair share.
The FPCCI highlighted that due to recent quarterly adjustments and fuel cost adjustments, the industrial tariff has risen from Rs 34 to nearly Rs 38 per unit, meaning the proposed rate of Rs 22.98 does not provide meaningful relief. Therefore, it urged NEPRA to set the incremental tariff at Rs 16 per unit to restore export competitiveness and ensure sustainable growth in electricity consumption.
The federation also raised concerns over the current benchmarking rules, including the 60% load factor, categorizing new types of consumers as “new consumers,” and the 2.8% annual increase factor. According to FPCCI, these conditions create complexity and inequality.
It proposed that the load factor or baseline should be determined based on a three-year weighted average of verified consumption:
- 50% from fiscal year 2024–25,
- 30% from 2023–24,
- 20% from 2022–23.
This method would ensure that all consumers—including captive, non-captive, load extension cases, and category-change cases—are treated equally, improving transparency and fairness.
The FPCCI added that this formula would also ensure justice for industries that shifted to the electricity grid after the gas levy. It further criticized the reference period (December 2023 to November 2024) as unfair, noting that it penalizes efficient industries while benefiting less efficient units.
The federation emphasized that to achieve the package’s objectives, the mechanism must be simple, verifiable, and transparent, and that the proposed three-year average formula would create a predictable system for both NEPRA and consumers.
The business community warned that if the package is implemented in its current form, it will fail to meet the expectations of both the government and industry, as its structure does not align with ground realities. They urged NEPRA and the Ministry of Energy to adopt the revised formula so that the package can genuinely contribute to industrial recovery.
The FPCCI added that the success of reforms should be measured not only by temporary fiscal savings but also by improvements in competitiveness and industrial productivity, which are possible only through a fair tariff policy and sustainable industrial growth.
