ISLAMABAD: The business community has voiced serious concerns over the abrupt withdrawal of a promised Rs7.41 per unit electricity relief and the prolonged outage of the 969-megawatt Neelum-Jhelum Hydropower Project (NJHP), warning of accelerating de-industrialisation.
These grievances surfaced during a public hearing held by the National Electric Power Regulatory Authority (Nepra), on the Central Power Purchasing Agency’s (CPPA) request for a Rs8.7bn refund — equal to 65 paise per unit — to consumers due to lower-than-expected fuel costs in June. Nepra members Amina Ahmed and Anwar Maqsood Khan presided over the session.
Several industrialists, referencing a recent meeting with Field Marshal Asim Munir, lamented that the prime minister’s announcement in March of Rs7.41 per unit tariff relief was not time-bound, yet its impact had dwindled. The actual reduction now stands at just Rs1.15 per unit in base tariff terms. As a result, applicable power rates have surged from around Rs30 per unit to Rs34-35 from July onwards.
Amir Shaikh, a Lahore-based businessman, said a promised Rs1.71 per unit reduction — based on an additional Rs10 per litre petroleum levy — should have remained intact since the levy is still being collected. “Even the gas levy on captive power plants was meant to lower power tariffs, but this hasn’t been implemented,” he said.
Leaders warn of industrial shutdowns as power tariffs rise to Rs35 per unit despite earlier relief promises
He told the hearing that during discussions with the field marshal, the business community had pointed out that power rates fell to Rs29-30 per unit following the prime minister’s announcement, but have since climbed to Rs35. This contradicts the Special Investment Facilitation Council’s (SIFC) commitment to reduce industrial power tariffs to 9 cents (around Rs25 per unit) in the current fiscal year.
“Instead of a reduction from Rs29 to Rs25, rates have risen back to Rs34-35, or 11-12 cents per unit,” said Mr Shaikh. He urged the government to acknowledge this reversal and adopt corrective measures.
He also highlighted that the inclusion of fertiliser subsidies in RLNG pricing was making electricity generation more expensive. “The industrial sector is already on the brink, and these hikes could push it into over-closure,” he warned. He further questioned whether the Power Division’s promise to abolish the 1.5pc electricity duty from July 1 had been officially implemented, though no government representative responded.
A representative from the FPCCI and a Karachi-based industrialist said that falling demand from the national grid — driven by the rapid adoption of solar energy — had improved the financial outlook of distribution companies. As solar generation replaces expensive fossil fuel-based power, it also helps cut transmission losses, especially in high-loss areas.
“The real efficiency gains in Discos are coming from solarisation,” he said, noting that this transition is reducing both fuel costs and technical losses.
Karachi-based businessman Arif Bilwani criticised the government’s failure to follow through on its promises regarding renegotiations with Independent Power Producers (IPPs). “There was a lot of hype about cheaper electricity from revised IPP contracts, but none of it has materialised,” he said, adding that it appears as though the 969MW Neelum-Jhelum and the 747MW Guddu power plants have been effectively written off.
Responding to the concerns, CPPA CEO Rehan Akhtar said the energy mix in June was broadly in line with expectations and that overall fuel costs were slightly lower than reference projections. He said this minor saving resulted in negative fuel cost adjustments, partly due to the retirement of older, inefficient government-owned plants.
Regarding Neelum-Jhelum, Mr Akhtar confirmed that the plant would remain non-operational for about two years due to technical issues identified in a recent study.
He said the negative fuel cost adjustment reaching consumers would amount to 15 paisa per unit, factoring in the 65 paisa negative adjustment in August, replacing June’s 50 paisa adjustment.
Mr Akhtar added that power consumption in June was 2pc higher than the same month last year and 7.6pc more than in May 2025. Total electricity delivered to distribution companies stood at 13,310 gigawatt hours (GWh), up from 12,367 GWh in May and 13,071 GWh in June 2024.
He said average fuel cost for June 2025 was Rs7.68 per unit, down from Rs9.25 in June last year, against a reference cost of Rs8.33 per unit.
Published in Dawn, July 31st, 2025