By SKM
January 14, 2026
ISLAMABAD: Pakistan’s industrial sector has reached a breaking point as soaring electricity and gas prices continue to erode export competitiveness, former commerce minister and Patron-in-Chief of the All Pakistan Textile Mills Association (APTMA) Dr Gohar Ejaz warned on Wednesday.
He said Pakistan is steadily losing export orders to regional competitors where electricity tariffs average around 9 US cents per unit, compared to 12 cents or more for Pakistani industry, making local manufacturers increasingly uncompetitive in global markets.
“Energy costs are now deciding winners and losers in international trade—and Pakistan is losing,” Dr Ejaz said.
His warning comes as the Special Investment Facilitation Council (SIFC) is scheduled to meet business leaders today (Thursday) to hear concerns over high taxation—reportedly up to 60 percent—weak governance, and elevated energy prices, according to well-placed sources.
Referring to the recent NEPRA tariff rebasing hearing, Dr Ejaz said it was disclosed that the power sector would require a subsidy of PKR 629 billion in the coming fiscal year, while the government has allocated only PKR 248 billion.
He said the resulting gap is being covered through cross-subsidisation, pushing electricity tariffs higher for industrial consumers. According to Dr Ejaz, without this cross-subsidy burden, industrial power tariffs would be close to 9 US cents per unit, even after accounting for inefficiencies and governance failures in the power sector.
“This burden belongs to the government, not industry,” he said, warning that continued pressure on manufacturers would lead to plant closures, job losses, falling exports and deeper fiscal stress.
Dr Ejaz stressed that while subsidies are a legitimate policy tool, they must be funded transparently through the budget, not imposed indirectly on productive sectors. “Forcing industry to subsidise other consumers is not social policy—it is a policy failure,” he said.
Power Division Response
In response, the Power Division said the government has already taken significant steps to ease the burden on industry.
It said that since March 2024, the industrial cross-subsidy burden has been reduced from PKR 225 billion (Rs 8.9 per unit) to PKR 102 billion (Rs 4.02 per unit)—a reduction of PKR 123 billion.
The Power Division added that the industrial tariff (including taxes) has fallen from Rs 62.99 per unit in March 2024 to Rs 46.31 per unit by December 2025, while the national average tariff declined from Rs 53.04 to Rs 42.27 per unit.
It attributed the reduction to the closure of inefficient power plants and renegotiation of contracts with Independent Power Producers (IPPs), with further negotiations under way.
The government has also introduced a surplus power package, allowing industrial and agricultural consumers to access additional electricity at PKR 22.98 per unit for three years, helping reduce average tariffs.
In addition, a circular debt settlement plan aims to clear outstanding liabilities within five to six years, after which the debt servicing surcharge of Rs 3.23 per unit will be removed.
The Power Division noted that the rapid growth of off-grid and hybrid solar users has distorted subsidy requirements, with protected consumers doubling from 11 million in 2021 to 22 million.
This shift has increased the cross-subsidy burden on industrial, commercial, bulk and high-consumption domestic users, continuing to weigh on overall industrial competitiveness. Ends
