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Key business associations, including FPCCI, KATI, and BQATI, have urged Nepra to revise the Prime Minister’s incremental power package by reducing the industrial tariff from Rs22.98 to Rs16 per unit, aiming to boost industrial consumption and competitiveness.
The federal cabinet approved the incremental power package to reduce subsidies and encourage grid consumption. However, industries argue that high tariffs and cross-subsidies continue to limit the effectiveness of the plan, creating financial strain on manufacturers.
In letters to Nepra, FPCCI noted that while the plan could cut subsidy requirements by Rs300 billion, industries still face a Rs131 billion cross-subsidy burden. Industrial tariffs have risen from Rs34 to nearly Rs38 per unit due to fuel and quarterly adjustments, with a fixed incremental rate offering limited relief.
FPCCI suggested a three-year weighted average for calculating baselines (50% FY2024–25, 30% FY2023–24, 20% FY2022–23) instead of fixed escalation formulas. This approach, they argue, would fairly reflect industrial performance and encourage a shift from captive to grid power.
A FPCCI spokesperson said,
“The entire purpose of this package is to stimulate demand. Our proposed methodology ensures predictability and transparency for both utilities and consumers.”
Business groups emphasised that incentives must last long enough to support new investments and production cycles. They warned that without a simplified, data-driven tariff structure, the package may fail to increase consumption or revenue, urging Nepra and the Ministry of Energy to adopt the proposed revisions.
