The National Electric Power Regulatory Authority (NEPRA) on Thursday deferred its decision on the federal government’s proposal to reduce electricity tariffs by Rs1.71 per unit for all consumers, including those served by K-Electric, for a three-month period.
The proposed relief, aimed at easing the burden on power consumers, is to be financed through an additional Rs58.6 billion generated via a recent increase in the Petroleum Development Levy (PDL). The levy on petrol and diesel was raised from Rs60 to Rs70 per litre, with the government redirecting this revenue to subsidise electricity tariffs.
During a public hearing on the proposal, NEPRA was informed that the total Tariff Differential Subsidy (TDS) has surged to Rs266 billion and could rise to Rs324 billion following the implementation of the latest relief package. The government had already secured cabinet approval before submitting the request to NEPRA.
Presiding over the hearing, the NEPRA chairman stated that work is underway to implement the Prime Minister’s broader relief plan, which includes a tariff cut of Rs7.69 per unit for industrial consumers and Rs7.41 per unit for domestic consumers, excluding lifeline users. Of this, consumers are expected to receive immediate relief of Rs5.03 to Rs5.04 per unit, with the remaining reduction to be incorporated in the upcoming third-quarter Quarterly Tariff Adjustment (QTA).
The immediate relief of approximately Rs5.03 per unit is derived from a combination of factors: Rs1.36 per unit under the Fuel Charges Adjustment (FCA), Rs1.71 per unit under the proposed QTA, and Rs1.9 per unit through the TDS. These components form the short-term relief package designed to ease the financial burden on consumers amid rising energy costs.
However, confusion arose during the hearing regarding the exact quantum of relief. Industrialist Aamir Sheikh welcomed the initiative but pointed out discrepancies, noting that while NEPRA cited Rs5 per unit in relief, the Power Division had referenced Rs6 per unit. He also sought clarity on whether the upcoming QTA relief would be implemented in the current quarter (April–June) or deferred to July–September. “If the next QTA is granted this quarter and is around minus Rs1 per unit, it would allow industries to plan export sales accordingly,” he said.
Other stakeholders, including Arif Bilawani and Tanveer Barry, echoed these concerns and urged NEPRA to address the prevailing confusion, particularly among industrial consumers.
Power Division officials emphasized that the relief would apply to all power distribution companies, including K-Electric, for three months—excluding lifeline consumers. They explained that the government intends to absorb the cost of the subsidy through anticipated stability in petroleum prices over the coming months.
Additional relief is also being passed on through renegotiated agreements with Independent Power Producers (IPPs). Officials revealed that Rs12 billion in savings from five IPPs have already been factored into the recent QTA. These negotiations, involving 32 IPPs, are ongoing, with hearings for seven already completed at NEPRA.
To address the growing circular debt, the government is in talks with commercial banks to finalize a sustainable financial structure. Officials reiterated that, given the current economic situation, relief is being routed through quarterly adjustments rather than annual rebasing.
NEPRA officials confirmed that the third QTA is expected to be submitted in the second week of April. The authority will now review the data before issuing a formal determination.
The hearing also addressed the impact of rising net metering connections on grid-based consumers. Officials noted that the growing number of net metering users—now at 283,000—has led to an increase in grid tariffs by Rs1.5 per unit. If left unchecked, the cumulative impact over a decade could reach Rs424 billion. NEPRA stated that the government is actively considering policy adjustments to address this imbalance and ensure fairness in the upcoming tariff rebasing.
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