Ahmed Khan Malik

 Industrialists across Karachi have voiced strong concern over what they describe as an “unjust and economically damaging” electricity tariff regime imposed on the city.

Multiple trade bodies have urged the federal government and the National Electric Power Regulatory Authority (NEPRA) to urgently revisit the structure, warning that the prevailing rates are eroding Karachi’s competitiveness, investment prospects, and employment landscape.

The latest multi-year tariff (MYT) determination for K-Electric, which many had hoped would bring relief, has instead triggered widespread frustration. According to industry representatives, the tariff remains burdened with surcharges, unpredictable fuel cost adjustments (FCAs), and retrospective billing practices that have largely nullified any notional reduction announced for the city.

Leaders from the Karachi Chamber of Commerce and Industry (KCCI), the Korangi Association of Trade and Industry (KATI), the Federal B Area Association of Trade and Industry (FBATI), and others jointly criticised the policy, saying Karachi, the country’s largest industrial and commercial hub, continues to face an uneven playing field compared to other distribution regions.

KCCI Vice President Muhammad Arif Lakhani said that although the base tariff had been revised downward on paper, the additional charges applied to Karachi consumers kept actual bills unchanged or even higher. “Many businesses are receiving surprise arrears due to retroactively applied FCAs, which they call financially destabilising and a violation of regulatory certainty. Factories cannot plan production or manage cash flows when energy costs fluctuate so unpredictably,” he said.

Lakhani added that surcharges imposed on Karachi consumers are unrelated to the city’s power utility or its financial structure. “Karachi is being forced to shoulder cost burdens meant for other regions, a situation that is both unfair and economically counterproductive,” he said, arguing that the city’s role as Pakistan’s economic engine warrants a tailored tariff design rather than a blanket national formula.

KATI representative Sheikh Umar said that trade bodies are collectively demanding corrective measures, including an immediate review and withdrawal of surcharges applied to Karachi, transparent and forward-looking procedures for FCAs to eliminate retroactive billing, rationalisation of the tariff structure to reflect the city’s actual cost of service, and mandatory consultation with industrial stakeholders before any future revisions.

He stressed that the industrial sector cannot continue absorbing rising energy prices indefinitely. “Karachi contributes a major share to Pakistan’s exports and tax revenues; undermining its industrial health ultimately hurts the national economy,” he said.

Umar urged the prime minister, the federal energy ministry, and NEPRA to take urgent notice. “Failure to act will have severe consequences, shrinking industrial output, falling exports, rising unemployment, and deeper economic stagnation in the country’s commercial capital,” he warned.

Credit: INP-WealthPk