The federal government of Pakistan has formally petitioned the National Electric Power Regulatory Authority (NEPRA) to approve a reduction of Rs1.71 per unit in electricity tariffs. This proposed adjustment, intended to be implemented from April to June 2025, aims to stimulate electricity demand and provide financial relief to consumers.

Key Details of the Proposal:

  • Scope of Reduction: The tariff cut is proposed for all distribution companies, including K-Electric. However, lifeline domestic consumers are excluded from this adjustment.
  • Subsidy Mechanism: The reduction will be facilitated through an increase in the tariff differential subsidy, with the federal government covering the Rs1.71 per unit decrease for the specified three-month period.
  • Regulatory Review: NEPRA has scheduled a hearing on April 4 to evaluate the government’s petition.

Context and Implications:

The government’s initiative aligns with recent efforts to manage electricity pricing effectively. Notably, the International Monetary Fund (IMF) approved a reduction of Re1 per unit in electricity tariffs, financed by levies on gas-consuming captive power plants.

Additionally, independent power producers (IPPs) have expressed willingness to reduce tariffs by up to Re0.50 per unit and waive over Rs11 billion in late payment surcharges, contingent upon the government withdrawing ongoing legal proceedings and investigations into alleged excessive profits.

These developments reflect a concerted effort by Pakistani authorities to balance fiscal stability with consumer relief in the energy sector.