Government plans new electricity tariff package to boost power demand

The government is preparing a new electricity tariff package to stimulate power consumption as demand continues to decline, officials informed the National Electric Power Regulatory Authority (Nepra) during a public hearing.

 

Power Division officials said the proposed package would address time-of-use tariffs, captive power plants and battery energy storage systems, although details will be shared with Nepra once the plan is finalised.

 

The disclosure came as the Central Power Purchasing Agency (CPPA-G) sought approval for a PKR 1.20 per unit Fuel Charges Adjustment (FCA) for electricity consumed in June 2026 to recover PKR 15.7 billion from consumers. Since an existing PKR 0.34 per unit FCA will expire, the net increase in August electricity bills is expected to be around PKR 0.86 per unit, subject to Nepra's approval.

 

Officials reported that electricity consumption in June fell 3.3% year-on-year, with total units sold declining to 9.995 billion from 10.337 billion a year earlier. They attributed the decline to increased solar adoption, the conversion of tube wells in Balochistan to solar power, weather conditions and other factors, although industrial consumption grew by 2.8%.

 

Nepra questioned the performance of power sector entities, criticising excessive revenue-based load shedding and arguing that lower system losses had been achieved by shutting down feeders and transformers rather than tackling electricity theft and improving governance.

 

The regulator also raised concerns over transmission constraints limiting the use of cheaper electricity, while industry representatives highlighted the impact of unplanned outages at power plants and greater reliance on expensive fuels such as furnace oil and RLNG.

 

Officials said the reference fuel cost for June was PKR 7.714 per unit, while the actual fuel cost reached PKR 8.90 per unit, resulting in the proposed FCA increase. They also maintained that the availability of nuclear power plants remained within contractual limits despite temporary outages at three facilities.