Power Division mulls optional tariff for industrial users

ISLAMABAD: Under a special initiative of Federal Minister for Power, Sardar Awais Ahmed Khan Leghari, the Power Division is considering the introduction of a new optional tariff mechanism aimed at facilitating industrial consumers and improving efficiency in electricity usage. According to official sources, the minister has already chaired several internal consultative and technical meetings on the proposed framework. Under the plan, industrial consumers will have the option to adopt a multi-slab tariff structure, with electricity pricing based on average marginal cost signals across defined time-of-use slabs. The mechanism is intended to better reflect the actual cost of power supply during different periods. The proposed tariff will comprise two key components: fixed charges and variable energy charges. Fixed charges will be determined on the basis of Maximum Demand Indicators (MDI) and are expected to be relatively higher, encouraging consumers to optimize and reduce peak demand. Variable energy charges, on the other hand, will be rationalized and aligned more closely with actual energy costs, ensuring cost-reflective pricing. READ MORE: Nepra pricing: AGP flags higher tariffs due to Discos’ inefficiencies The Power Division believes the new structure will deliver multiple benefits, including improved load management by enabling industries to shift operations to lower-cost periods, increased electricity consumption during off-peak hours to enhance system load factor, and reduced peak demand, thereby easing pressure on the grid and limiting the need for costly capacity additions. Officials also expect the mechanism to support industrial productivity and competitiveness by offering more predictable and potentially lower energy costs. Overall, the proposed tariff reform is being viewed as a step towards sustainable industrial growth, improved energy efficiency, and long-term economic development. The Minister directed that the proposal be refined through extensive stakeholder consultations to ensure its effectiveness and inclusivity. In this regard, consultations will be held with industrial consumers, chambers of commerce, and trade bodies across the country, with feedback to be incorporated into the final design. The first consultative conference is scheduled to be held online on March 26. Meanwhile, in a separate meeting, the Minister lauded the National Grid Company’s (NGC) indigenization policy, terming it a major success. He noted that contracts worth Rs 12. 673 billion have been awarded to local industries, with savings of around 40 per cent on transmission line conductors compared to imports. He said these outcomes reflect the government’s commitment to structural reforms aimed at promoting local manufacturing, reducing reliance on imports, and delivering tangible economic gains. The policy, he added, is supporting local manufacturers through educational orders, joint ventures with international partners, and the establishment of local subsidiaries. So far, nine educational orders worth Rs 900 million have been issued, while 11 local firms have been registered for capability development, strengthening the country’s industrial base. The Minister emphasized that the benefits of the policy go beyond cost savings, contributing to macroeconomic stability through foreign exchange conservation. He added that improved delivery timelines by local manufacturers are helping accelerate transmission infrastructure projects. Looking ahead, he described indigenization as a key driver of export-led growth, particularly in the steel, cable, and conductor sectors, where domestic capacity has expanded significantly. He reaffirmed the Power Division’s commitment to continuing such initiatives to promote industrial self-reliance and long-term economic resilience. Copyright Business Recorder, 2026

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