Pakistan Power Tariff Cut: FY26 Update
- The National Electric Power Regulatory Authority (NEPRA) has approved a Rs1.49 per unit reduction in the base power tariff for the upcoming fiscal year.
- The tariff cut offers a glimmer of hope for consumers facing rising electricity costs.
- The government had previously explored various scenarios for tariff revisions, with potential reductions ranging from 30 paisa to Rs2.25 per unit.
Pakistan anticipates relief! NEPRA has decisively approved a Rs1.49 per unit cut in the base power tariff for the upcoming fiscal year. This critical reduction, stemming from lower capacity payments, awaits final federal government approval. While this signals a positive shift, remember that the ultimate consumer price will also include fuel costs, potentially hovering between Rs34 adn Rs35 per unit. The government considered diverse scenarios for tariff revisions,painting a complex picture influenced by exchange rates and inflation,as News Directory 3 reports. Understand the projections,which range from a 30 paisa to a Rs2.25 cut, and factor in variables like the US and Pakistan’s inflation rates. This decision will be crucial for electricity demand which projects an increase by 3 to 5%. Discover what’s next as the cabinet reviews and subsidy allocations finalize!
NEPRA’s Power Tariff Cut Offers Relief Amid Economic Uncertainty
Updated June 26, 2025
The National Electric Power Regulatory Authority (NEPRA) has approved a Rs1.49 per unit reduction in the base power tariff for the upcoming fiscal year. This decision, confirmed by NEPRA Spokesperson Safeer Hussain, has been submitted to the federal government for final approval.
The tariff cut offers a glimmer of hope for consumers facing rising electricity costs. The reduction is primarily attributed to lower capacity payments. though, the final consumer price will also include fuel costs, perhaps ranging from Rs8.16 to Rs9.52 per unit, pushing the total cost to between Rs34 and Rs35 per unit before taxes and surcharges.
The government had previously explored various scenarios for tariff revisions, with potential reductions ranging from 30 paisa to Rs2.25 per unit. The most optimistic scenario, involving a stable exchange rate of Rs280 against the dollar, projected the largest reduction, bringing the average base tariff down to Rs24.75 per unit from the current Rs27.
However, a weaker local currency, depreciating to Rs300 against the dollar, would limit the reduction to around 30 paisa per unit. These projections also factor in variables such as U.S. inflation at 2%, Pakistan inflation at 8.65%, a Karachi Interbank Offered Rate of 11.9%, an international interest rate of 4.07%,and transmission losses of 2.80%.
Electricity demand is projected to increase by 3% to 5%, contingent on the exchange rate remaining stable at Rs280. All other scenarios assume an exchange rate of Rs300.
What’s next
Following NEPRA’s determination, the federal cabinet will review the proposal for approval and subsidy allocation. The power division will then submit a revised tariff table to NEPRA, incorporating subsidies for different consumer categories, before official notification, effective july 1, as committed to the International Monetary Fund.