By Staff Reporter
KARACHI: Pakistan’s electricity generation climbed to an all-time monthly high in January as lower tariffs and a government subsidy program lured more industrial users onto the national grid, offsetting higher costs for captive power plants.
Output rose to 9,140 gigawatt-hours last month, the highest ever recorded, according to a note from Topline Securities released on Saturday. The surge reflects a broader push by the government to revive industrial activity through targeted incentives, including an incremental consumption package approved at the end of 2025.
“This surge was driven by lower tariffs, higher incremental consumption from industrial consumers, and a shift of industrial users to the grid amid increased levies on captive power plants,” the brokerage said. The program, designed to encourage surplus electricity use among manufacturers, has already shown tangible results.
On Friday, a spokesperson for the Power Division provided an overview of the three-year industrial concessional package’s performance for December and January, highlighting its role in boosting demand. Over the two months, 127,686 industrial consumers tapped into the subsidies, receiving a combined relief of Rs12.125 billion. That covers about 46% of the country’s total 278,961 industrial users.
The package offers a discount of Rs10.3 per unit on excess power consumption, applying to both small and large industries. In total, utilities sold 1,176 million units of electricity to industries under the surplus package during the period, making up 23.8% of overall industrial sales. Breaking it down by month, December saw 557 million units distributed through the program, accounting for 23% of that month’s total industrial consumption. The financial relief amounted to Rs5.743 billion, benefiting 125,829 consumers—or 45% of the industrial base.
January’s figures edged higher, with 619 million units sold under the package, representing 24.5% of industrial usage for the month. That translated to Rs6.382 billion in subsidies, reaching the same 127,686 consumers, or 46% of the total.
The uptick aligns with Islamabad’s efforts to stabilize the power sector amid chronic challenges like circular debt and transmission losses. By shifting industries away from self-generated power, often fueled by expensive gas or diesel, the government aims to optimise grid utilisation and support economic growth in a country where manufacturing contributes about 13% to gross domestic product.
Still, analysts caution that sustaining this momentum will depend on broader reforms, including tariff rationalisation and infrastructure upgrades. Topline’s note didn’t specify projections for February, but the brokerage emphasised the package’s potential to fuel long-term industrial expansion. Pakistan’s power generation has historically fluctuated with seasonal demand and fuel availability, but January’s record suggests the incentives are gaining traction.
Copyright © 2021 Independent Pakistan | All rights reserved
