FPCCI wants industrial power tariff below 9 cents for all, calls 12 cents a temporary fix

The industrial electricity tariff in Pakistan must come down below 9 US cents a unit, for every industrial consumer and not only those in special schemes, if exports are to grow, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Atif Ikram Sheikh said in a statement on Saturday 10 October, Business Recorder reported.

He credited the government with cutting the industrial rate from 16 cents to 12 cents a unit over the past two years, and thanked Prime Minister Shehbaz Sharif and Power Minister Sardar Awais Ahmad Khan Leghari. But he called the 12-cent rate and the selective packages "temporary fixes".

FPCCI's demand on the industrial power tariff

• Target: below 9 cents a unit, about a quarter less than today's 12 cents.
• Who should get it: all industrial consumers, including the B3 and B4 categories (industry supplied at higher voltages).
• Why B3 and B4: they still carry a cross-subsidy for other consumers even though, being supplied at high voltage, they cost less to serve, Sheikh said.
• The IMF: he argued the Fund should have no objection to a lower industrial tariff because it raises output and exports.

The two schemes industry says do not work

Incremental Consumption Package. A concessional rate applies only to electricity used above a consumer's baseline, its earlier consumption. The existing load is billed as before, so a factory that is not expanding gets little from it.

Optional Two-Part Time-of-Use (ToU) tariff. A fixed capacity charge per kW each month, plus a per-unit charge that changes with the time of day (separate non-solar, solar-hour and peak rates). The aim is to shift factory demand into daytime solar hours, when the grid has spare supply, and flatten the evening "duck curve".

Industry has raised objections with the Power Division over the last six months, Sheikh said: the fixed charges are too high, and the scheme is unworkable while war-related logistics disruptions continue. Factories have already arranged their shifts around daytime and their own solar, and rooftop solar is still cheaper than grid power even at the proposed solar-hour rate, so in his view the tariff would neither bring industry back to the grid nor fix the duck curve. He added that any benefit given to one industry is recovered from all other consumers.

What 9 cents means in rupees

At today's dollar rate, 12 cents and 9 cents can be converted with our currency converter; the gap of 3 cents a unit adds up quickly for a factory using hundreds of thousands of units a month. The tariff itself is notified in rupees; the cent figures are how industry compares Pakistan's power cost with other exporting countries.

What it means for you

A cut for all industry would ease costs for exporters and for factories in industrial cities such as Faisalabad, Sialkot, Lahore and Karachi. But, as Sheikh himself noted, cross-subsidies move costs between consumer groups, so how any cut is paid for matters to households too. To see what your own home bill comes to at current slabs, use our electricity bill calculator.

No response from the Power Division was reported. We will update this story if the Power Division or NEPRA changes the industrial tariff.