Government Signals New Electricity Tariff Package as Power Demand Declines
ISLAMABAD: The federal government has indicated that it is preparing a new electricity tariff package as power demand continues to decline across the country. Officials also proposed an increase in fuel cost charges that could affect electricity bills issued in August, subject to regulatory approval.
During a public hearing held by the National Electric Power Regulatory Authority (NEPRA), government representatives said electricity consumption in June fell by around 3.3% compared to the same month last year. Total electricity sales stood at 9.995 billion units, down from 10.337 billion units recorded a year earlier.
According to officials, electricity usage declined in most consumer categories, including domestic, commercial, agricultural, and bulk consumers. However, the industrial sector recorded modest growth in electricity consumption.
Proposed Fuel Cost Adjustment
The Central Power Purchasing Agency (CPPA) requested a fuel cost adjustment of approximately Rs1.20 per unit for electricity consumed in June. If approved by NEPRA, the adjustment would be reflected in consumers’ August electricity bills.
Officials explained that higher fuel costs were mainly linked to increased purchases of liquefied natural gas (LNG) from the spot market and limited use of furnace oil after contracted LNG supplies were unavailable.
Government Working on New Tariff Plan
Power Division officials confirmed that work is underway on a new electricity pricing package. The proposal is expected to include measures related to:
- Time-of-use electricity tariffs
- Captive power plant policies
- Battery energy storage systems
- Grid efficiency improvements
Authorities said the proposal is still being finalized and will be submitted to NEPRA for review once completed.
NEPRA Raises Concerns
During the hearing, NEPRA questioned the performance of power sector entities and expressed concern over reports of prolonged electricity outages in different parts of the country despite declining demand.
The regulator also highlighted concerns about revenue-based load management practices and emphasized the need to improve system efficiency through better governance and action against electricity theft rather than relying on power outages.
Power Sector Performance
Government officials reported that distribution companies have reduced system losses over the past two years, while industrial representatives called for a review of existing electricity pricing policies and raised concerns over the impact of higher fuel costs.
Officials also clarified that although some nuclear power plants experienced temporary technical issues, the overall availability of nuclear generation remained within operational limits.
The proposed fuel cost adjustment and any future tariff revisions will take effect only after receiving approval from NEPRA.
