Industry Rejects Govt’s Power Package, Warns of Factory Closures

Pakistan’s business community has strongly opposed the government’s new incremental electricity consumption package. The National Electric Power Regulatory Authority (NEPRA) held a public hearing on Tuesday, where representatives from key industrial associations challenged the Power Division’s plan to offer electricity at Rs. 22.98 per unit for incremental consumption by industrial and agricultural users. Businesses warned that the proposed tariff structure could cripple industrial growth and trigger factory closures if implemented in its current form. During the hearing, chaired by NEPRA Chairman Waseem Mukhtar, industrial leaders from the All Pakistan Textile Mills Association (APTMA), Federation of Pakistan Chambers of Commerce and Industry (FPCCI), and Karachi Chamber of Commerce and Industry (KCCI) said the scheme was “discriminatory, overly complex, and finalized without consultation.” They urged the government to instead fix the power tariff at nine cents per kilowatt-hour and lower the load factor from 60 percent to 40 percent to ensure fair participation across sectors. Industry representatives argued that the new tariff, tied to an ambitious 25 percent growth in consumption, ignored the ground realities of high energy costs, weak demand, and growing solar adoption. “None of the people drafting this policy understand the financial realities of factories,” said Rehan Jawed of the FPCCI. “Industrial policy should be inclusive, not selective.” APTMA’s representative, Syed Absar Ali, said most textile units, which are responsible for nearly 60 percent of Pakistan’s exports, would be excluded from the benefits due to the high load factor and lack of incentives for captive or hybrid power users. The Power Division, led by Additional Secretary Mehfooz Bhatti, defended the scheme, calling it “subsidy-neutral and essential for grid stability”. Officials said the package could add Rs. 1.16 trillion to GDP and help reduce the burden of Rs. 1.7 trillion in capacity payments owed to idle power plants. They claimed that the policy was based on “lessons learned” from earlier plans and aimed to encourage factories to run more shifts and stabilize consumption patterns disrupted by rapid solarisation. Officials revealed that around 1,300 megawatts of demand had shifted off-grid as consumers moved to solar power, while agricultural consumption had dropped 40 to 50 percent. They added that peak electricity hours had now shifted to night-time, putting grid reliability at risk. However, NEPRA members questioned the Power Division’s lack of consultation with industry and the plan’s unclear review mechanism if marginal costs rise. “Wouldn’t it have been better to find a middle ground before seeking approval?” asked NEPRA’s technical member Rafique Ahmad Shaikh. Business leaders stressed that previous fixed-rate regimes had proven far more effective in boosting exports and consumption. “High tariffs and cross-subsidies have already pushed industries to the brink,” said KCCI’s Tanveer Barry. “If this package goes through unchanged, closures will accelerate.” NEPRA is expected to revisit the proposal before final approval, following growing calls from the private sector for a regionally competitive and simplified tariff framework that supports industrial recovery rather than deters it.