FPCCI Rejects SBP’s Status Quo in Interest Rate Atif Ikram Sheikh, President FPCCI

Karachi: Mr. Atif Ikram Sheikh, President FPCCI, has called called for the immediate correction
of industrial electricity tariffs by demanding the removal of cross subsidies; Power Holding
Limited (PHL) surcharge and a rational redesign of peak-hour (Time-of-Day) electricity charges,
which are placing an unsustainable burden on Pakistan’s industrial and export sectors.

The FPCCI President Atif Ikram Shaikh stated that industrial electricity tariffs have drifted far
away from cost-reflective principles. Instead of reflecting the actual cost of power supply, tariffs
have become layered with non-energy charges that inflate production costs and weaken
competitiveness

Mr. Atif Ikram Sheikh elaborated that industries are currently bearing a cross-subsidy burden
ranging between Rs. 4 to Rs. 7 per unit, in addition to a PHL surcharge of Rs. 3.23 per unit, both
of which have no linkage with the real cost of electricity consumed.

He clarified that the PHL surcharge is effectively an additional cross subsidy, regardless of the
accounting or recovery mechanism used. From an industrial perspective, any charge recovered
through the electricity bill is a direct cost of production.

These costs cannot be absorbed by industry, nor can they be passed on in competitive domestic
and export markets, he added.

FPCCI highlighted that industrial consumers are the most disciplined and efficient segment of
the power system, with near-100 percent bill recovery, minimal technical losses due to
high-voltage connections, and predictable consumption patterns.

Despite this, industry continues to finance inefficiencies and structural issues that originate
elsewhere in the system.

FPCCI Chief categorically rejected peak-hour (Time-of-Day) electricity pricing, stating that it
must be abolished. Any peak pricing that does not reduce the 24-hour average cost is
unacceptable and functions solely as a penalty on industry. The Federation asserted that only
off-peak pricing incentives should be enforced, with no increase in overall electricity cost.

FPCCI President warned that the current structure of peak-hour charges discourages continuous
industrial operations, disrupts production planning, and pushes industries toward loss. This
weakens grid demand, increases stranded capacity costs, and ultimately raises tariffs for all
consumers.

FPCCI emphasized that a stable, competitive industrial economy requires electricity pricing that
is predictable, transparent, and strictly cost-reflective. Penal charges and artificial tariff
distortions undermine investment confidence and contradict the objective of promoting exports
and documented, grid-based industrial growth.

In view of the above, FPCCI demands the immediate removal of cross subsidies from industrial
electricity tariffs, withdrawal of the PHL surcharge for industrial consumers, and a rational
redesign of peak-hour electricity charges based on genuine cost rebalancing rather than revenue
extraction.

Mr. Atif Ikram Sheikh concluded that industry cannot continue to function as the shock absorber
for power-sector inefficiencies, and urgent tariff correction is no longer optional but necessary.

Brig Iftikhar Opel, SI (M), Retd.

Secretary General