Khurram Ijaz says the Rs2.0581 per-unit electricity tariff increase will raise production costs, fuel inflation and further weaken the competitiveness of Pakistani businesses.
KARACHI, September 5, 2026: Khurram Ijaz, General Secretary of Businessmen Panel Progressive (BMPP) and former Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has strongly criticised the latest increase in electricity tariffs, terming it another major setback for trade and industry already struggling with high operating costs and weak business conditions.
The National Electric Power Regulatory Authority (NEPRA) on September 4 approved a positive Fuel Charge Adjustment (FCA) of Rs2.0581 per unit for electricity consumed in July 2026, placing an additional financial burden on consumers.
Khurram Ijaz said the industrial sector was already facing unprecedented pressure from high energy costs, expensive raw materials, rising operating expenses and subdued demand. The latest increase in electricity charges, he said, would further push up the cost of production and undermine the competitiveness of Pakistani businesses.
He said the continued rise in energy and fuel prices, coupled with growing inflationary pressures, had substantially increased the cost of doing business. Any further increase in electricity prices would make it increasingly difficult for industries to compete in both domestic and international markets.
Ijaz pointed out that headline inflation accelerated to 11.1% year-on-year in August 2026, compared with 9.2% in July and 3.1% in August 2025, according to data released by the Pakistan Bureau of Statistics (PBS).
He warned that higher electricity tariffs, together with rising petroleum prices, could further fuel inflation and increase pressure for monetary tightening by the State Bank of Pakistan (SBP).
He said the SBP’s benchmark interest rate had already increased to 11.50%, after declining from the historic high of 22% to 10.50%. Higher interest rates, he added, were discouraging private-sector investment and making it increasingly difficult for businesses to finance expansion and new projects.
“The business community is facing a difficult choice between investing in expansion and retiring existing liabilities,” Ijaz said, adding that the prevailing economic environment was discouraging businesses from taking fresh loans.
He noted that the private sector reduced its outstanding borrowing from the banking system by more than Rs371.6 billion between July 1 and August 21, reflecting weak demand for bank financing amid elevated interest rates and subdued economic activity.
Ijaz said the combination of expensive energy, high financing costs and weak demand was also beginning to affect Pakistan’s external trade position.
He noted that the country’s trade deficit widened by 18.11% year-on-year to $7.12 billion during July-August 2026, compared with $6.03 billion in the corresponding period of the previous fiscal year, according to PBS data.
The country’s imports rose by 13.03% to $12.58 billion during the first two months of FY2026-27, compared with $11.13 billion in the same period a year earlier. Exports increased by a comparatively modest 7.04% to $5.46 billion, from $5.10 billion in July-August 2025.
Khurram Ijaz said the latest electricity tariff increase was particularly concerning at a time when Pakistan needed to strengthen industrial production, attract investment and accelerate export growth.
He urged the government and power-sector regulators to review the electricity tariff structure and take immediate measures to reduce the cost of energy for productive sectors.
He stressed that industrial growth and export expansion could not be achieved without competitive energy prices and a predictable cost structure.
Ijaz called for a coordinated economic policy aimed at reducing the cost of doing business, encouraging private investment and strengthening the competitiveness of Pakistani industry.
He said sustainable economic growth required policies that supported industrial expansion, investment and exports rather than imposing additional costs on businesses already operating under severe economic pressures.