KARACHI: Karachi Chamber of Commerce and Industry (KCCI) President Rehan Hanif has rejected the proposed Rs2.52 per unit Fuel Charges Adjustment (FCA) for July 2026 and opposed an anticipated Rs1.34 per unit Quarterly Tariff Adjustment (QTA), warning that higher electricity costs could put further pressure on struggling industries.
Hanif said the two adjustments, if applied together, could add nearly Rs3.86 per unit to September electricity bills before taxes. He said the impact could be even higher because the existing negative QTA relief of Rs1.9857 per unit expires after August, while August bills already include a positive FCA of Rs0.7503 per unit.
KCCI Questions Power Cost Calculations
According to Hanif, CPPA-G’s July 2026 data submitted to NEPRA showed an actual fuel cost of Rs9.6112 per unit against a reference cost of Rs7.0929, resulting in the requested FCA of Rs2.5182 per unit.
NEPRA is scheduled to hear the FCA request on August 27.
Hanif questioned why consumers should bear the cost when reference prices are based on inaccurate or unrealistic forecasts. He argued that repeated adjustments make electricity costs difficult for businesses to predict and undermine efforts to reduce the cost of doing business.
Concern Over Circular Debt
The KCCI president also raised concerns over the power sector’s circular debt, saying consumers continue to pay various surcharges and taxes despite repeated efforts to restructure outstanding liabilities.
He referred to the government’s Rs1.225 trillion circular-debt restructuring arrangement with 18 banks and said the sector’s circular-debt stock nevertheless increased by Rs61 billion during FY2025-26, from Rs1.614 trillion to Rs1.675 trillion.
Hanif called for transparent reconciliation of the reported Rs421 billion receivable from K-Electric, including principal and markup amounts, arguing that disputed or unverified liabilities should not be passed on to consumers.
KCCI Warns of Pressure on Industry and Exports
Hanif said Pakistan’s industrial recovery remains vulnerable to further energy-price increases. He noted that while large-scale manufacturing grew by 4.98% during FY2025-26, output declined in June 2026 on both a year-on-year and month-on-month basis.
He also pointed to a widening trade gap, with July 2026 merchandise exports reaching $2.962 billion while imports stood at $6.94 billion.
The KCCI president said higher and unpredictable electricity costs could raise production expenses, weaken export competitiveness and put additional pressure on small and medium-sized enterprises that form part of larger industrial supply chains.
Call for NEPRA Review
Hanif urged NEPRA to reject or substantially reduce the proposed July FCA at its August 27 hearing and called for the proposed positive QTA to be withheld until an independent technical and financial audit is completed.
He also urged Prime Minister Shehbaz Sharif to convene a meeting involving KCCI, industrial associations, NEPRA, the Power Division, CPPA-G and the Independent System and Market Operator to align electricity-sector policies with the government’s industrial and export objectives.
Meta Description: KCCI rejects proposed power tariff hikes, warning higher electricity costs could hurt Pakistan’s industries, SMEs and exports.
Also Read :New Currency Notes Could Take a Year After Approval
Today's E-Paper