The government intends to lower electricity costs by Rs1.15 per unit nationwide.
The federal government has formally petitioned the National Electric Power Regulatory Authority (Nepra) for a reduction in power tariffs of Rs1.15 per unit, with plans to lower electricity prices nationwide beginning July 1.
All consumer categories will be affected by this cut, with the exception of domestic lifeline users, who currently receive substantial subsidies. For the first two lifeline consumer slabs, the government has advised against altering tariffs.
Before formally announcing and enforcing the updated rates, Nepra has set a public hearing for July 1 to complete the procedure.
Read more: The government plans to introduce a uniform power tariff on July 1.
The petition claims that lifeline users who use up to 50 units per month will still pay Rs3.95 per unit, while users who use 50 to 100 units will continue to pay Rs7.74 per unit.
For FY2025-26, a flat reduction of Rs1.15 per unit is suggested for all other consumers, including commercial, industrial, agricultural, domestic (non-lifeline), and bulk users. Depending on current rates, the relief percentage will range from 3% to 10%.
For example:
• The price per unit for protected domestic users (1–100 units) will now be Rs10.54, a 9.8% decrease from Rs11.69.
• For protected consumers, the 101–200 unit slab will cost Rs13.01 instead of Rs14.16, an 8% decrease.
• Customers without protection who use more than 200 units will pay Rs23.44 for the first 100 units instead of Rs23.59, which is a nearly 5% reduction.
The reduction stays at a flat Rs1.15 per unit for all other categories, which translates to a 3–4% drop.
The average electricity rate will drop from Rs32.75 to Rs31.60 per unit.
Nepra’s tariff decisions for FY2025–26 serve as the basis for these changes, which also take into account power purchase costs, updated subsidy allocations, and IMF agreement commitments.
For FY2025-26, Nepra had previously set a national average tariff of Rs34 per unit, which was lower than the current year’s rate of Rs35.50.
Federal subsidies have decreased by 12.9%, from Rs1.19 trillion in FY2024–2025 to Rs1.04 trillion for FY2025-26. This is reflected in the proposed tariff. Important modifications to subsidies include:
• The tariff differential subsidy (TDS) for discos has decreased from Rs276 billion to Rs249.14 billion.
• Tubewells in Balochistan: Down from Rs9.5 billion to Rs4 billion.
• KP and former FATA merged districts: reduced from Rs65 billion to Rs40 billion (a 38 percent decrease).
• K-Electric: Cut from Rs174 billion to Rs125 billion, a 28% reduction.
• AJK: TDS dropped from Rs108 billion to Rs74 billion, a 31.5% decrease.
• Tribal areas: reduced from Rs65 billion to Rs40 billion, a 39% cut.
The Pakistan Energy Resolving Fund, aimed at timely payments to Chinese IPPs, retains a stable allocation of Rs48bn. Meanwhile, Rs400bn has been earmarked in the budget for other subsidies — slightly higher than the previous year’s Rs394bn.
The Power Division emphasised that the tariff proposal aligns with the National Electricity Policy 2021, which advocates for cost recovery and sectoral financial sustainability through efficient tariff structures.
The new uniform tariff proposal, based on Nepra’s July 13, 2024 determination (notified on July 14), was presented to the federal cabinet on June 28. Since the uniform tariff advances the government’s social and economic objectives, approval is anticipated without modification.
The government also affirmed it will continue a uniform consumer-end tariff for both K-Electric and other Discos, even after privatisation, using direct or indirect subsidies. Accordingly, K-Electric’s applicable uniform variable charge will be adjusted to meet its revenue needs, considering proposed subsidies and cross-subsidies.
