In a formal letter addressed to Adviser to the Prime Minister Dr. Syed Tauqir Hussain Shah, the Pakistan Textile Council (PTC) has called for the immediate removal of cross-subsidies embedded in industrial electricity tariffs, warning that persistent power pricing distortions are eroding Pakistan’s export competitiveness, particularly in the textile sector.
It urged the government to remove cross-subsidy costs amounting to Rs. 160 billion embedded in industrial electricity tariffs across XDISCOs and K-Electric, noting that such a reform would allow industries to be charged the actual cost of electricity, improve grid utilization, and reduce incentives for firms to shift to off-grid power generation.
The Council stated that industrial electricity tariffs currently carry a significant cross-subsidy burden, sharply increasing production costs for export-oriented manufacturers and placing Pakistan at a clear disadvantage compared to regional competitors.
The letter also raised serious concerns over the blanket application of the Time-of-Use (ToU) tariff regime, which imposes different rates for peak and off-peak hours on industries operating on a three-shift basis.
Exporters providing stable base-load demand are being penalized through peak-hour charges, forcing either production cuts or the absorption of unsustainable cost increases. With incremental tariff regimes already in place, the Council argued that the rigid ToU framework has lost its economic rationale and requires an urgent review.
PTC noted that Pakistan’s textile and apparel exports declined across all major product categories and key markets, including the European Union, the United States, and the United Kingdom, during the first half of FY2025–26. Terming the situation an export emergency, the Council cautioned that intensifying regional competition and impending trade agreements by neighboring countries could further weaken Pakistan’s export base unless decisive and time-bound government intervention is undertaken.
The PTC concluded that Pakistan’s textile sector retains the capacity, skilled workforce, and international market linkages needed to drive export-led recovery, but stressed that this potential can only be realized through immediate policy reforms that deliver a predictable, rational, and cost-competitive energy pricing regime.