Govt considers relief package for domestic, agricultural consumers

ISLAMABAD: In a major effort to provide relief to power consumers, the government has asked the National Electric Power Regulatory Authority (Nepra) to extend negative fuel charge adjustments (FCA) to domestic consumers using up to 300 units per month and agricultural consumers, who have been excluded from the relief since 2015.

Notably, these low-slab consumers were excluded from negative FCA relief on the grounds that they already receive subsidized electricity.

The Ministry of Energy (Power Division) in a formal request has asked Nepra to reconsider the long-standing policy. It highlighted that the existing policy, in place since 2015, prevents certain consumer categories from benefiting when fuel costs decrease. Nepra through its decision in June 2015 had exempted non-Time of Use (ToU) domestic consumers using up to 300 units from negative FCA adjustments. The exemption for agricultural consumers has been in place since November 2010. If the request is approved, the change could provide significant financial relief to millions of consumers.

The ministry noted that since the introduction of new domestic consumer categories—protected and non-protected—in 2021, tariffs for non-protected consumers have been gradually increased. Given the tariff rationalization efforts, it argued that continuing the policy of withholding negative FCA relief from non-protected domestic and agricultural consumers no longer aligns with the rationale behind previous decisions.

The ministry has now urged Nepra to review and reconsider the exclusion, potentially paving the way for broader relief to consumers amid rising electricity costs. The government claims that since June 2024, the domestic power tariff has decreased by Rs4 per unit, providing relief to consumers. However, since this relief is only passed on through the FCA mechanism, the existing policy prevents households using less than 300 units from benefiting, making the proposed policy change essential, an official told The News.

Separately, Secretary Power Division informed a parliamentary panel on Wednesday that consumers will start seeing cost reductions from revised agreements with independent power producers during the summer months.