ISLAMABAD: Pakistan’s power regulator Nepra on Tuesday concluded a hearing on the government’s request for uniform tariff, recommending the national average base electricity tariff cut by Rs1.14 per unit from the previous Rs32.73 per unit to Rs31.59 per unit for FY2025-26.
Nepra had earlier determined a national average tariff of Rs34.00/unit for the fiscal year 2025/26, Rs1.50/unit lower than last year’s Rs35.50/unit. After applying tariff differential subsidies and cross subsidies, the final base rate was revised to Rs31.59—a Rs1.14 per unit less than Rs32.73 per unit national average for the FY2024-25.
The government attributed the reduction to rupee stability, falling capacity payments, and declining global fuel prices—offering rare fiscal relief amid ongoing economic challenges. Interestingly, the government’s renegotiated deal with independent power producers (IPPs) would help shave Rs236 billion off capacity payments in FY26.
During the hearing, Power Division officials estimated that national electricity consumption in FY2025-26 will hover around 103 billion units, slightly lower than the 106 billion units projected for the current fiscal year. The revenue requirement for FY26 has also been revised down to Rs3.521 trillion, from Rs3.768 trillion a year earlier, documents presented at the hearing show.
“The decline in power generation costs by Rs1.27/unit and capacity charges by Rs1.34/unit has created room for tariff reduction,” a Power Division official told Nepra.
Despite the proposed tariff cut, capacity payments — fixed payments to power producers — will remain a heavy burden on consumers. The total capacity payments for FY26 are projected at Rs1.766 trillion, translating into Rs17.06/unit. On an annual basis, it is a Rs1.34/unit cut in these charges. In the FY 2024-25 the total capacity payments were Rs1.952 trillion, the official added. When asked about the impact of terminating/hybrid Take &Pay agreement with the IPPs on the capacity payments, the official said that the total reduction in capacity payments will be Rs236 billion.
Distribution margins are expected to rise to Rs396 billion from Rs391 billion, while Rs174 billion will be recovered from users as “use of system charges.” Nepra officials said the assumed exchange rate for FY26 has been revised from Rs300 to Rs290 per dollar.
According to Nepra data, 89 per cent of the country’s 38 million electricity users fall under the domestic category, and nearly 54pc are classified as lifeline consumers — those who consume up to 100 units per month. However, Nepra Member Maqsood Anwar warned that the lifeline category may soon phase out due to consumption patterns.
“Just one extra unit pushes many consumers out of lifeline protection,” said Anwar, adding that he has case files to prove how lifeline coverage is shrinking. Nepra Technical Member Rafiq Sheikh also flagged complaints about inflated lifeline readings, saying the authority was conducting an inquiry into the matter.