Electricity Tariff: Industry Opposes Rs25.30 Incremental Power Rate

KARACHI: The SITE Association of Industry (SAI) has demanded the immediate suspension of the National Electric Power Regulatory Authority’s (NEPRA) Incremental Consumption Package, describing the revised tariff of Rs25.30 per unit as “gross injustice” to consumers who have not benefited from the scheme.

In post-hearing comments submitted to NEPRA, SAI President Abdul Hadi argued that the additional cost of supplying incremental electricity should be borne exclusively by beneficiaries of the package rather than being passed on to general consumers through Fuel Cost Adjustments (FCA).

Citing NEPRA data, the association said the loss-adjusted marginal cost exceeded the previous incremental tariff of Rs22.98 per unit by Rs19.39 in April and Rs16.24 in May 2026. These differences reportedly resulted in losses of approximately Rs13.6 billion and Rs9.4 billion, respectively, which were absorbed by all consumers.

Hadi said the Independent System and Market Operator (ISMO) had confirmed during the hearing that the marginal price data was accurate and that the sharp increase in costs had been unforeseen. He also recalled that NEPRA’s original decision stated that any unforeseen losses would be borne only by consumers benefiting from the incremental package.

SAI further objected to the delay in the package’s semi-annual review, which was scheduled for June 2026 but took place four months later. The association maintained that the delay unnecessarily increased the financial burden on general consumers.

The association urged NEPRA to either suspend the package immediately or apply the revised marginal cost to all incremental consumption from June 9, 2026. It also proposed recovering the difference exclusively from package beneficiaries and crediting the recovered amount to general consumers through the next FCA or Quarterly Tariff Adjustment (QTA).

SAI said representatives of the industrial community, including the Karachi Chamber of Commerce and Industry (KCCI), Korangi Association of Trade and Industry, and Federal B Area Association of Trade & Industry, had also raised serious objections to the continuation of the package.

Hadi maintained that ordinary consumers had effectively paid the difference between the marginal price and the incremental tariff through higher FCA charges, despite not benefiting from the scheme. He called for these consumers to receive refunds of the excess amounts charged.

Warning of further increases in electricity and industrial production costs, Hadi said the revised tariff could undermine the competitiveness of local industry. He urged NEPRA to address every stakeholder objection on merit through reasoned decisions and establish a clear mechanism for withdrawing schemes that fail to achieve their intended objectives.