The Power Division announced on Wednesday that the cross-subsidy burden on Pakistan’s industrial consumers has been significantly reduced, falling from approximately Rs225 billion (around Rs8.90 per unit) in March 2024, when the current government assumed office to Rs102 billion (Rs4.02 per unit) at present. This reflects a substantial reduction of Rs123 billion.

According to official data, the industrial tariff (including taxes) has declined from Rs62.99/kWh in March 2024 to Rs46.31/kWh by December 2025, while the national average tariff has fallen from Rs53.04 to Rs42.27/kWh over the same period.

Before these changes, several industry stakeholders had criticised the electricity pricing framework. Former caretaker commerce minister Gohar Ijaz previously argued that the industrial sector was being pushed towards collapse due to an “unfair” tariff structure that compelled manufacturers to bear the financial burden created by inefficiencies in the power sector.

He maintained that government shortfalls were being shifted to industry, undermining Pakistan’s competitiveness in both regional and global markets.

Sectoral voices have continued to highlight concerns. Textile entrepreneur Aamir Sheikh noted that although the B3 tariff remains Rs33.26/kWh, the variable component has increased, as fuel cost adjustments (FPA) will now be billed at actual rates. He calculated that this effectively raises the tariff by Rs1.34/kWh.

The Power Division stated that the government has focused on lowering electricity costs through multiple reforms, including shutting down inefficient power plants and renegotiating contracts with Independent Power Producers (IPPs). Further negotiations with remaining IPPs are ongoing.

To encourage higher consumption and reduce average tariffs, a surplus power package has been offered, allowing industrial and agricultural users to purchase additional electricity at Rs22.98 per unit for a three-year period.

Additionally, a Circular Debt Management Plan (CDMP) has been launched to retire outstanding liabilities within 5–6 years. Once settled, the debt surcharge of Rs3.23 per unit will be withdrawn, providing further cost relief.

The Power Division also pointed out that the growing shift towards off-grid solar has distorted subsidy needs. Protected domestic consumers have doubled from 11 million in 2021 to 22 million, increasing fiscal pressure and expanding the cross-subsidy burden on industrial and commercial users.

Officials argue that commercial, bulk and higher-end domestic consumers currently bear subsidy levels well above those paid by industrial users.

Acknowledging that tariff structures serve broader socio-economic objectives, the Power Division said the government is examining additional measures, including subsidy rationalisation and debt refinancing to further reduce the industrial cross-subsidy burden alongside existing tariff cut initiatives.