S.M. Tanveer, FPCCI Leader and Patron-in-Chief UBG، has expressed serious concerns over the continued use of industrial electricity tariffs as a tool for cross subsidy, warning that this approach is steadily eroding Pakistan’s industrial competitiveness and export capacity. He stated that industrial tariffs are currently carrying a cross subsidy burden ranging from Rs 4.5 to Rs 7 per unit, with a total impact of Rs131 billion, which translates into an additional cost of nearly 20 percent on already expensive electricity. According to him, industry is barely managing to carry its own burden, and this extra cost is pushing many units towards closure or long term contraction. S.M. Tanveer pointed out that over the past few years, the number of protected consumers has almost doubled, yet instead of supporting these consumers through fiscal space, the government has chosen the easier route of loading this burden onto industry. He said this policy effectively uses industry as a balancing item for systemic failures, even though industry is the only segment that consistently pays, consumes, and creates employment. He further stated that the Power Ministry regularly claims improved performance and sector stability, yet there is no explanation for why a competitive electricity tariff of around 9 cents per unit has still not been delivered. If the sector is performing better, the benefit should be visible where it matters most, in the productive economy. Without this, claims of reform remain hollow. Referring to the government’s stated objective of increasing exports and exiting the IMF programme, S.M. Tanveer said these goals cannot be achieved by weakening the industrial base. No country has ever succeeded by making its exporters uncompetitive and expecting growth to follow. S.M. Tanveer noted that the load factors applied in the package have no technical or regulatory justification and appear to be lifted from theft and detection billing frameworks. Instead of encouraging genuine demand growth, the package will merely shift demand within industry, creating further distortions and deepening mistrust. He strongly urged the government and the Minister for Energy Power Division to immediately remove cross subsidy from industrial electricity tariffs and to stop using industry as a substitute for fiscal reform. He stressed that protecting industry is not a concession but an economic necessity.
S.M. Tanveer demands removal of Rs131 billion cross subsidy from industrial electricity tariffs
