Pakistan

Sections of Pakistan’s business community have challenged the government’s assertion that its recently announced energy tariff incentive has provided tangible relief to industry, arguing that the benefits cited by officials have not translated into meaningful cost reductions for major manufacturers.

According to official data from the Power Division, about 1.27 lakh industrial consumers availed the scheme in December 2025 and January 2026, receiving relief of Rs 12.125 billion. This accounts for roughly 46 per cent of the country’s nearly 2.79 lakh industrial power users, reported Dawn.

The package offers a three-year incremental framework, including a cut of Rs 4.04 per unit for industrial users and a shift in tariff rebasing from the fiscal year to the calendar year starting January 1, 2026. The government has maintained that both small and large units benefited to the tune of Rs 10.3 per unit on surplus electricity consumption.

Industry representatives, however, dispute this assessment. They contend that the relief largely accrued to dormant or low-capacity units, while B3 and B4 category industries—typically larger consumers that pay higher tariffs but do not add to grid losses—saw little net gain. They also argue that increases driven by fuel costs and quarterly adjustments have eroded much of the announced benefit.

Data shows that 1,176 million units were sold under the surplus electricity scheme over the two months, nearly a quarter of total industrial consumption. Of this, 557 million units were recorded in December with relief of Rs 5.743 billion, while January accounted for 619 million units and Rs 6.382 billion in benefits. However, the Federation of Pakistan Chambers of Commerce and Industry has warned that the fuel cost adjustment for January alone raised charges by Rs 1.78 per unit, with an additional Rs 0.40 per unit expected through quarterly revisions.

FPCCI President Atif Ikram Shaikh said more than half of the promised relief was neutralised within the same billing cycle. Business leaders have also criticised repeated tariff rebasing in July 2025 and January 2026, saying such frequent changes undermine planning, investment decisions and export competitiveness.

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Despite these concerns, Power Minister Sardar Awais Ahmad Khan Leghari has reiterated the government’s commitment to oversight and structural reforms in the power sector, assuring industry that further measures are being considered to stabilise tariffs and improve predictability, Dawn reported.