LAHORE: All Pakistan Textile Mills Association (APTMA) has raised serious concerns over the current electricity pricing structure, warning that Pakistan’s industrial base is being pushed toward irreparable decline due to unaffordable energy costs and an unsustainable cross-subsidy mechanism embedded in the national power tariff framework. Textile exports constituting more than 60 percent of Pakistan’s total export have been drastically declining for the past five consecutive months, with a sharp 8 percent drop recorded in December 2025 alone, underscoring the immediate economic impact of these distortions. Kamran Arshad Chairman APTMA addressing a largely attended Press Conference at Lahore criticised the government for not passing on to industrial consumers the benefit of a recent reduction in the base electricity tariff determined by the National Electric Power Regulatory Authority (NEPRA). He said that Power Division had maintained the industrial base tariff, citing a high number of domestic consumers receiving subsidised rates. Chairman APTMA said that costly electricity had crippled industrial activity, particularly in the textile sector. He said that due to abnormally high power tariff around 150 large textile units have shutdown during the past two years rendering hundreds and thousands of workers jobless. Kamran urged the government to abolish cross-subsidies imposed on industry and apply regionally competitive energy tariff to enable the local textile industry to compete in the global textile trade. He said that electricity tariffs for large-scale industrial consumers in Pakistan remain significantly higher than those in regional competitive economies, where electricity tariff for industrial usage ranges from ¢5 to 7.5 /kWh. In contrast, the effective tariff for Pakistani industries is more than ¢12/ kWh. This disparity is a core reason for the erosion of Pakistan’s export competitiveness, as the cross subsidy is a hidden tax that cannot be exported. Kamran said that the centre of the issue is the policy of cross-subsidisation, whereby industrial consumers are compelled to bear the cost of subsidies provided to other consumer categories. Regulatory filings and official disclosures show that the power sector will require a subsidy of Rs629 billion in 2026, while the Federal allocation stands at just Rs248 billion. The shortfall of Rs381 billion is being recovered through cross-subsidisation from industrial and other consumers. Asad Shafi Chairman APTMA North strongly opposed levy of hidden tax on industry and exports in the name of cross subsidy. He demanded that social subsidies for lifeline and protected consumers must be transparently funded by the state through the federal or provincial budgets. Shifting this financial obligation to the industrial sector undermines manufacturing, exports, employment, and investment at a time when Pakistan’s economy cannot afford further setbacks. Asad added that the current Time-of-Use (ToU) tariff regime is outdated and misaligned with actual demand patterns. Peak pricing hours no longer correspond with true peak system load, making the framework both economically inefficient and operationally irrational. The elevated peak-hour rates disrupt industrial load planning, raise operational costs, and discourage grid consumption at times when capacity is underutilized. Additionally, it incentivizes a shift toward solar and battery storage systems, further undermining demand for grid-supplied power. He strongly urged for elimination of the peak hours tariff for industrial consumers in favour of a single, flat rate. Asad said that the industry is already operating under high-cost conditions, with high interest rates, high tax rates, and global economic volatility. The added burden of inflated power tariffs has made many manufacturing operations financially unviable, leading to massive shut down and scaling back of operations. Other leading textile exporters, speaking on the occasion called for the immediate rationalization of power tariffs by removal of cross-subsidy and aligning of energy tariffs with regionally competitive levels of not more than ¢7.5/ kWh. Doing so will restore export competitiveness, upsurge investments, improve capacity utilization and create millions of jobs. Furthermore, a cost-of-service based tariff regime would enhance electricity demand, improve generation utilization, and further reduce per-unit costs, leading to system-wide efficiency gains. Meanwhile, SM Tanveer, Leader of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), has expressed concerns over reliance on remittances and debt-driven consumption, and not exports, for economic growth and development. He highlighted the challenges facing Pakistan’s exports, citing an estimated USD60 billion gap in potential exports. In a statement, Tanveer noted that Pakistan’s export share in GDP has declined from 16 percent in the 1990s to 10.4 percent in 2024. On the contrary, he said, Vietnam’s export-to-GDP ratio is 95 percent. Bangladesh, a country we used to look down on is around 20 percent. Thailand’s at 60 percent. He identified high production costs, limited market access, low productivity, and inadequate infrastructure as key factors contributing to this issue. “Pakistan’s exports are facing significant challenges, and it is imperative that we address these issues to unlock the country’s true potential,” Tanveer said. “We need to adopt a market-determined exchange rate, strengthen trade finance, improve logistics and compliance, and enhance trade agreements to boost our exports.” Tanveer emphasized the need for a comprehensive strategy to promote exports and reduce reliance on imports. “We must work together to create a business-friendly environment, invest in infrastructure, and promote innovation and value addition in our export-oriented sectors,” he added. The FPCCI leader urged the government to take concrete steps to address the challenges facing Pakistan’s exports and unlocks the country’s potential for growth and development. Copyright Business Recorder, 2026