KARACHI: The Korangi Association of Trade and Industry (KATI) has appealed to the government to rectify what it describes as an anomaly in the B3 and B4 industrial electricity tariff categories. The association has requested the Prime Minister, along with the Federal Minister for Finance and the Federal Minister for Power, to instruct the National Electric Power Regulatory Authority (NEPRA) to address this issue promptly.
According to Korangi Association of Trade and Industry, KATI President Muhammad Ikram Rajput highlighted that the current tariff structure conflicts with NEPRA's Cost of Service principle, which suggests that electricity tariffs should decline as supply voltage increases. Instead, Rajput argued that industrial consumers in the B3 and B4 categories are being charged rates significantly higher than their actual cost of service, placing a substantial financial strain on critical manufacturing sectors.
Although B3 and B4 consumers constitute just 1.2 percent of Pakistan's industrial electricity consumer base, they account for 59.3 percent of the total industrial electricity consumption, according to Rajput. He pointed out that this tariff anomaly imposes an additional annual burden of approximately Rs55 billion, exacerbated by a Rs3.23 per unit PHL surcharge, which further elevates production costs for the industry.
Rajput emphasized that resolving the tariff discrepancy would not necessitate any extra government subsidy. Instead, the adjustment could be achieved on a revenue-neutral basis within the B1 to B4 industrial consumer categories. While welcoming recent reductions in industrial electricity tariffs, Rajput argued that these measures alone are inadequate for restoring Pakistan's competitiveness in global markets.
He stressed the necessity of reducing the effective industrial electricity tariff to below 9 US cents per unit to empower exporters and import-substitution industries to compete with regional economies. Drawing attention to Pakistan's external trade challenges, Rajput noted that the country's imports reached US$69.6 billion during FY2025-26, with the trade deficit widening to US$39.47 billion. He asserted that affordable electricity is crucial for bolstering domestic manufacturing, increasing exports, reducing import reliance, and fostering sustainable economic growth.
The KATI President urged the Prime Minister to direct the Ministry of Energy and NEPRA to promptly revise the industrial tariff structure in accordance with the Cost of Service principle, eliminate unjustified distribution charges for B3 and B4 consumers, and ensure that industrial electricity tariffs are reduced to internationally competitive levels without delay.