Pakistan's Industry Questions Energy Relief as Fuel Costs Wipe Out Gains

The package includes a three-year incremental plan featuring a Rs4.04 per unit reduction for industry and a shift in tariff rebasing from a fiscal year to a calendar year cycle starting January 1, 2026. The government maintains that both small and large industries received a benefit of Rs 10.3 per unit on surplus electricity consumption, Dawn reported. However, industrial representatives dispute these claims. They argue that the relief primarily benefited inactive or limited-scale units, while larger B3 and B4 category industries, which contribute no losses to the grid but pay higher tariffs, saw little real advantage. Business leaders also contend that rising fuel costs and quarterly adjustments have effectively wiped out much of the announced reduction.

1,176 million units of electricity were sold under the surplus package in the two-month period, accounting for nearly 24 per cent of total industrial consumption. December saw 557 million units sold under the scheme, providing Rs5.743 billion in relief, while January recorded 619 million units and Rs6.382 billion in benefits. Yet the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has warned that the fuel cost adjustment (FCA) for January alone increased charges by Rs1.78 per unit, with another Rs0.40 per unit expected under quarterly revisions, as highlighted by Dawn.

FPCCI President Atif Ikram Shaikh stated that more than half of the promised relief had been neutralised within the same billing cycle. Industry leaders further criticised repeated tariff rebasing in July 2025 and January 2026, arguing that such volatility undermines planning certainty and export competitiveness, despite official assurances from Power Minister Sardar Awais Ahmad Khan Leghari of continued oversight and reform, as reported by Dawn.

- ANI