ISLAMABAD The Power Division has announced a major reduction in the industrial cross subsidy burden bringing significant relief to the manufacturing and business sectors. According to official figures the burden has declined from 225 billion rupees in March 2024 to 102 billion rupees currently marking a reduction of 123 billion rupees since the present government assumed office.
The division said the industrial cross subsidy per unit has dropped from 8.9 rupees to 4.02 rupees reflecting a sharp correction in electricity pricing. As a result the industrial power tariff including taxes has fallen from 62.99 rupees per unit in March 2024 to 46.31 rupees per unit by December 2025. During the same period the national average electricity tariff declined from 53.04 rupees to 42.27 rupees per unit.
The Power Division attributed the reduction to a series of structural reforms including the termination of inefficient power plants and the renegotiation of contracts with independent power producers. These measures lowered generation costs and helped ease pressure on electricity prices. Officials said negotiations with remaining power producers are continuing to secure further tariff relief.
To further support industry and agriculture the government introduced a surplus power package allowing additional electricity consumption at a discounted rate of 22.98 rupees per unit for three years. This initiative has helped reduce average industrial tariffs while improving utilisation of surplus generation capacity.
The division also highlighted the launch of a circular debt settlement plan aimed at eliminating outstanding power sector liabilities within five to six years. Once cleared the debt surcharge of 3.23 rupees per unit will be removed providing further relief to consumers and improving sector sustainability.
It noted that the rise in off grid solar use has doubled protected consumers to 22 million increasing subsidy pressure and shifting the burden to industrial and commercial users. The government said it is pursuing subsidy reforms and debt refinancing to further reduce cross subsidy pressure and restore competitiveness across the economy.
