Nepra Ends Costly Power Burdens
- Islamabad - the national Electric Power Regulatory Authority (Nepra) is advocating for significant changes to Pakistan's electricity tariffs, aiming to alleviate burdens on industrial consumers and stimulate economic...
- Shaikh, highlighted the detrimental effects of the current tariff structure on industrial viability. he specifically pointed to the practise of cross-subsidization - where one consumer group effectively subsidizes...
- The authority also expressed concern over the high per-unit capacity purchase price (CPP), driven in part by the continued underutilization of thermal power plants.
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Nepra Calls for Tariff Reform to Boost Pakistani Industrial Output
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- Updated December 12, 2025 at 12:03:28 PM
Islamabad – the national Electric Power Regulatory Authority (Nepra) is advocating for significant changes to Pakistan’s electricity tariffs, aiming to alleviate burdens on industrial consumers and stimulate economic growth. Nepra’s proposals, outlined in a recent note to the government during tariff determinations, target issues like high technical losses, taxes, surcharges, and the inefficiencies of underutilized power plants.
Key Issues Identified by Nepra
Nepra’s Member Technical, Rafique A. Shaikh, highlighted the detrimental effects of the current tariff structure on industrial viability. he specifically pointed to the practise of cross-subsidization
– where one consumer group effectively subsidizes another – as a major impediment to growth. Shaikh argued that this framework undermines industrial viability, suppresses growth, and ultimately contradicts broader national economic objectives.
The authority also expressed concern over the high per-unit capacity purchase price (CPP), driven in part by the continued underutilization of thermal power plants. Nepra is investigating whether this underutilization is due to genuine lack of demand or other factors.
Loadshedding Exacerbates the Problem
Shaikh noted that despite the apparent lack of demand suggested by underutilized plants, seven out of twelve distribution companies (Discos) are still implementing loadshedding exceeding 12 hours per day in certain regions. This practice not only penalizes compliant consumers but also erodes confidence in the national grid, prompting manny to seek choice power sources. Nepra believes that this loss-based loadshedding
is failing to achieve its intended goals.
Impact of Current Tariffs on Industrial Competitiveness
The current tariff structure places a significant burden on Pakistani industries, making it challenging for them to compete in international markets.High electricity costs directly impact production expenses,reducing profit margins and hindering investment. Eliminating cross-subsidization and addressing inefficiencies in power generation and distribution are seen as crucial steps towards leveling the playing field.
| Component of Electricity Cost | Estimated Percentage of Total Cost (2024) | Impact on Industrial Consumers |
|---|---|---|
| Base Tariff | 40% | Directly affects production costs. |
| Taxes & Surcharges | 25% | Increases overall cost of electricity. |
| Technical Losses | 15% | Passed on to consumers through higher tariffs. |