ISLAMABAD: Despite strong resistance from industry and export-oriented businesses, the National Electric Power Regulatory Authority (NEPRA) has moved ahead with approving a uniform national average electricity tariff for Distribution Companies (DISCOs) and K-Electric (KE) for Calendar Year 2026, a decision that has reignited debate over the sustainability of Pakistan’s industrial competitiveness.
At a public hearing on the federal government’s motion, industrial stakeholders warned that the embedded cross-subsidy structure—estimated at nearly Rs130 billion—continues to disproportionately burden industrial and export consumers, undermining growth and export viability. While NEPRA’s recent determinations proposed a modest reduction of 61 paisa per kWh for CY 2026, businesses argue the relief is largely cosmetic due to the scale of cross-subsidisation.
NEPRA fixed the national average tariff at Rs33.38 per kWh for CY 2026, down from Rs34.00 per kWh in FY 2025–26, and forwarded the determinations to the federal government under Section 31(4) of the NEPRA Act for implementation of a uniform tariff. In line with the National Electricity Policy, the tariff framework will also apply to K-Electric consumers from January 1, 2026.
Industry representatives revealed that industrial consumers are effectively paying up to Rs7 per kWh in cross-subsidy, with total cross-subsidies estimated at Rs131 billion in DISCO areas and Rs160 billion within KE’s jurisdiction. They argued that Pakistan’s industrial power tariff of 12.9 cents per kWh is significantly higher than regional competitors, particularly China, where subsidised electricity has fueled large-scale industrial expansion.
Business leaders warned that exports cannot remain competitive unless industrial tariffs are aligned closer to 9 cents per kWh, achievable only by eliminating cross-subsidies and debt-related surcharges. They also highlighted job market pressures, noting that 10,000 new entrants require employment daily, which depends on industrial growth.
Responding to concerns, the Power Division stated that industrial cross-subsidies have already been reduced from Rs225 billion to Rs102 billion, and overall industrial tariffs have fallen by 26 per cent since March 2024. Officials also outlined long-term energy reforms, including expanded clean energy under the IGCEP 2035, declining power imports, and the growing impact of solarisation on electricity sales.
While NEPRA acknowledged the concerns, industry groups maintain that structural tariff reform—rather than marginal reductions—is critical to restoring export competitiveness, boosting investment, and preventing further industrial decline.