The federal government has proposed a new initiative to foreign donors, including the World Bank and the Asian Development Bank, in a bid to reduce electricity prices for industrial and agricultural sector consumers by Rs10.5 per unit, aiming to revive demand that has dropped by 20% due to unaffordable costs, The Express Tribune reported.
This proposal is part of an effort to reinvigorate the economy and make energy more accessible to key sectors. The Industrial Support Package (2026-28) includes a price reduction for incremental electricity use, with industrial connections priced at Rs22.98 per unit and agricultural sector rates set at Rs22.98, offering a Rs7.77 benefit per unit.
The price reduction will only apply to additional electricity consumption compared to the period between December 2023 and November 2024. The package is designed to be cost-neutral and is expected to address concerns over circular debt, while still maintaining some financial balance.
The proposal was presented to representatives from international donors, including the World Bank and Asian Development Bank. These donors expressed concerns about the sustainability of the package, particularly in the absence of comprehensive reforms in Pakistan’s power sector.
While the government assured that the package would be beneficial, some diplomats raised questions about the sustainability of the demand increase once the package expires, given the existing issues with grid reliability and the delay in sector reforms.
The government has faced challenges with energy demand, as industrial consumption has dropped by 20% over the past two years. Despite the proposed relief, experts warn that addressing the underlying issues in Pakistan’s power sector—such as grid capacity and service quality—must be a priority to ensure long-term success and prevent future instability.
The government hopes this package will alleviate immediate pressures and stimulate growth in industrial and agricultural sectors, but stakeholders are urging a more balanced approach that includes both pricing reforms and structural changes to the power sector.
