Karachi, January 14, 2026 – The SITE Association of Industry (SAI) has strongly criticized the continued imposition of cross-subsidy on industrial electricity tariffs, warning that the policy is eroding industrial competitiveness, discouraging investment and hindering sustainable economic growth.
In a statement, SAI President Ahmed Azeem Alvi said industrial consumers are currently bearing a cross-subsidy of Rs4.5 to Rs7 per unit, adding nearly 20 percent to already uncompetitive power costs. He noted that many industrial units are struggling to absorb their basic cost structures, and the additional burden has pushed several to the brink of closure.
Alvi highlighted that distorted energy pricing is a key reason Pakistan has failed to develop and retain large-scale industries, despite having a sizeable base of small industrial units. Policies that penalize higher consumption and expansion, he said, naturally restrict industries from achieving scale, efficiency and global competitiveness.
He further pointed out that the number of protected electricity consumers has risen sharply in recent years. Instead of supporting these consumers through fiscal measures, the government has shifted the burden onto industry, a strategy he described as unfair and unsustainable, particularly when industrial consumers pay their bills fully and on time.
Commenting on the Incremental Consumption Package, the SAI president termed the scheme flawed and inconsistent. He said industries with higher consumption during the reference period from December 2023 to November 2024 have been excluded, despite representing genuine and stable demand.
Alvi also questioned the load factors used in the package, saying they lack regulatory or technical justification and appear to be borrowed from enforcement frameworks rather than incentive-based policies.
He urged the government to remove cross-subsidy from industrial tariffs, withdraw the existing incremental package, and redesign power incentives on transparent and rational grounds to support industrial revival, exports and job creation.