Business Recorder
ISLAMABAD: The Ministry of Energy (Power Division) has sought detailed input from industry to fine-tune its proposed optional industrial tariff package, as stakeholders expressed reluctance to opt for the scheme in its current form. The Power Division claims to have concluded three consultative sessions on the proposed multi-slab Time-of-Use (ToU) industrial tariff regime, aimed at ensuring a transparent, inclusive, and participatory approach to tariff reform.The sessions were attended by a wide range of industrial stakeholders from across the country, including representatives of FPCCI, APTMA, LCCI, KATI, SITE, and the Pakistan Association of Large Steel Producers (PALSP), along with other major industrial consumers and members of the media. READ MORE: Industrial, agri consumers: PD starts talks on new ToU tariff mechanism The Power Division stated that it has acknowledged all feedback and remains committed to incorporating stakeholders’ input in finalizing the tariff structure. However, most participants opposed the proposed mechanism of increasing fixed charges while reducing variable charges. Tanveer Barry, representing the Karachi Chamber, argued that fixed charges should be based on actual Maximum Demand Indicator (MDI) rather than sanctioned load. He noted that industries, forced to shut down due to unforeseen circumstances, including war, cannot afford to pay fixed charges on sanctioned capacity. “Fixed charges are too high and must be minimised. The exit and entry notice period should not exceed two billing cycles. Industries operating at or below a 45 percent load factor will not benefit from the package, which needs to be redesigned to ensure broader applicability. There should also be clarity that consumers who do not opt for the package will not face any adverse impact. The government should also define a clear duration for the scheme,” he said. Arif Bilwani, Rehan Javed, and Aamir Sheikh also expressed concerns that the proposed package, in its current form, would fail to attract industrial consumers, urging policymakers to revise it in line with industry recommendations. There is also a perception within the business community that the proposed increase in fixed charges is intended to finance capacity payments. In its official statement, the Power Division said stakeholders appreciated the proactive engagement of the Minister for Energy (Power Division) and termed the consultative process a positive step toward evidence-based and stakeholder-driven policymaking in the power sector. Participants shared detailed observations and recommendations, focusing on key aspects such as the opt-in structure and duration of the tariff regime, flexibility for entry and exit, the framework for fixed charges based on MDI, and the applicability of Quarterly Tariff Adjustments (QTA) and Fuel Charges Adjustments (FCA). Sector-specific concerns were also highlighted, particularly by the steel industry, which pointed to higher MDIs combined with lower utilization levels, stressing the need for calibrated or differentiated treatment within the tariff design. The Power Division reiterated that the proposed tariff is optional and not mandatory, allowing industrial consumers to adopt it based on their operational requirements and load profiles. The sessions also underscored the importance of deploying smart metering infrastructure to effectively implement ToU-based pricing, which is a central feature of the proposed regime. PPMC observed that if the industry opts for the new revenue neutral package, which is yet to be approved by NEPRA would extend benefit of Rs 7-8 per unit if their load factor is increased by about 70 per cent. Copyright Business Recorder, 2026
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