The Pakistan Association of Large Steel Producers (PALSP) has reached out to Federal Minister for Power Sardar Awais Ahmad Khan Leghari, seeking urgent intervention to address challenges faced by the domestic long steel industry, particularly in relation to electricity tariffs and demand conditions.

In a formal communication, the Association highlighted that Pakistan’s long steel segment has an installed production capacity of around 9 million tonnes, positioning it to consume roughly 7 billion electricity units annually. However, subdued demand and low capacity utilisation mean the sector currently consumes only 3–4 billion units per year.

With Pakistan already bearing substantial capacity payment obligations due to surplus power generation capacity, PALSP argued that the mismatch between available power and electricity demand presents an opportunity rather than a burden. The Association noted that steelmaking is highly energy-intensive, with electricity ranking as the second-most critical input cost.

Drawing parallels from global practices, PALSP suggested that Pakistan could adopt a model previously seen in China, where surplus electricity was indirectly exported through cost-effective steel production. According to the Association, supplying power to domestic producers at reduced rates—potentially aligned with existing capacity payment levels—could help absorb surplus generation, improve industrial competitiveness, and support exports.

PALSP also raised apprehensions regarding the government’s ongoing tariff rationalisation measures, cautioning that after several difficult years, another hike or policy shift could push mills towards closure. Such an outcome, they warned, would reduce industrial electricity consumption, increase idle generation capacity, and further inflate capacity payments—ultimately contributing to higher tariffs for all consumers.

The Association urged the government to consider industrial electricity pricing as both an economic and strategic tool, arguing that expanding consumption through competitive tariffs would support industrial output, employment, and the broader energy ecosystem. Without corrective action, PALSP fears the country may face a dual challenge of rising capacity payments and declining industrial growth in the coming years.