ISLAMABAD: The government on Wednesday announced plans to introduce an optional multi-tariff time-of-use (ToU) mechanism for industrial consumers to improve electricity utilisation through price-based signals.
“The Power Division is considering introduction of a new optional tariff mechanism aimed at facilitating industrial consumers and enhancing overall efficiency in electricity utilisation,” an official statement said.
The Power Division Pakistan said multiple internal consultations and technical discussions have already been held under the leadership of Power Minister Sardar Awais Khan Leghari.
Under the proposed system, industrial users will have the option to adopt a multi-slab tariff structure, where electricity pricing will be based on average marginal cost signals across different time-of-use periods. The aim is to better reflect actual supply costs at various times.
The tariff will include two key components: fixed charges and variable energy charges, consistent with the existing tariff structure.
Fixed charges will be linked to Maximum Demand Indicators (MDI) and are expected to be relatively higher, encouraging consumers to manage and reduce peak demand.
Variable energy charges, on the other hand, will be rationalised and aligned more closely with actual energy costs, enabling more accurate pricing.
The framework is intended to promote efficient load management by encouraging industries to shift operations to lower-cost time periods, thereby increasing electricity use during off-peak hours and improving the overall system load factor.
It is also expected to help reduce pressure on the grid, limit the need for expensive capacity expansions, and enhance industrial productivity through more predictable and potentially lower energy costs.
“Overall, this tariff reform is expected to act as a catalyst for sustainable industrial growth in Pakistan, improving energy efficiency while supporting long-term economic development,” the Power Division said.
The statement added that the minister has directed authorities to ensure the framework remains inclusive and effective through extensive stakeholder consultations.
In this regard, consultations will be held with industrial consumers, chambers of commerce, and trade bodies nationwide, and their feedback will be incorporated to further refine the proposed mechanism.
