ISLAMABAD: Pakistan’s government is preparing a new power tariff package as electricity demand continues to decline across the country. The move comes as authorities seek an additional fuel cost adjustment of around Rs1.20 per unit from consumers.
The proposed adjustment could help collect nearly Rs15.7 billion in August bills for electricity consumed during June. Meanwhile, the National Electric Power Regulatory Authority (Nepra) raised concerns over power sector performance and ongoing loadshedding issues.
Electricity Consumption Falls Across Major Sectors
During a public hearing, government officials informed Nepra that electricity consumption in June remained lower than expected. Demand dropped by around 5 percent compared with estimates and declined 3.3 percent compared with the same period last year.
The country sold 9.995 billion electricity units in June 2026. In comparison, consumers used 10.337 billion units during the same month last year.
Furthermore, officials explained that demand declined across several sectors. Industrial consumption increased by 2.8 percent. However, domestic and commercial usage dropped between 3.5 percent and 5 percent.
Agriculture and bulk consumers recorded a sharper decline of 12 percent to 29 percent. Officials linked the reduction to multiple factors, including solar adoption, weather conditions, and changing consumption patterns.
Power Shortages and Fuel Costs Raise Concerns
The government team informed Nepra that limited availability of Qatar’s contracted LNG forced authorities to purchase expensive fuel from the spot market. Additionally, the power sector used a small amount of furnace oil, which increased fuel costs.
Nepra Member Development Maqsood Anwar Khan questioned the continuation of excessive loadshedding. He also expressed concern over reports of protests in different areas due to power outages.
Power companies confirmed that they conducted loadshedding for four days in June. The duration ranged between 93 megawatts and 730 megawatts. Moreover, revenue-based loadshedding remained a major issue.
Government Works on New Tariff Structure
Power Division official Naveed Qaiser said the government is developing a new tariff package. The plan will address time-of-use rates, captive power plants, and battery energy storage systems.
He explained that battery storage systems could benefit both consumers and the national grid. However, large-scale utility storage projects may increase tariff pressure due to their financial impact.
Qaiser did not reveal complete details of the package. He said the government would present the proposal to Nepra after completing the review process.
Meanwhile, industrial representatives from Karachi requested changes to the incremental tariff package. They argued that the policy affected other consumer groups, including household users.
Nepra Questions Power Sector Efficiency
Government officials stated that Disco inefficiency costs declined from Rs591 billion to Rs326 billion within two years. They attributed the improvement to a one percent reduction in system losses.
However, Nepra Member Maqsood Anwar Khan disagreed with the explanation. He said companies reduced losses through loadshedding and shutting down grid stations rather than improving management.
“The improvement could only be achieved when teams are in the field and remove kundas and theft, not through shutting down machines while people suffer in scorching heat,” he said.
Consumers Face Higher Fuel Adjustment Charges
Industrial consumers also raised concerns about technical issues at three nuclear power plants. However, Nepra and government officials stated that nuclear plants maintained around 94 percent availability.
They added that plant downtime remained within the eight percent contractual limit. Additionally, industrial users criticized fuel cost adjustments caused by technical shutdowns and reliance on expensive fuels.
Power Division official Rihan Akhtar said consumers would face a net increase of around 86 paisa per unit. He explained that the existing 34 paisa fuel adjustment would end, while a new Rs1.20 per unit adjustment would apply in August after regulatory approval.
The Central Power Purchasing Agency reported that June’s reference fuel cost stood at Rs7.714 per unit. However, actual fuel expenses reached Rs8.9 per unit, creating the need for additional charges.
As the government develops a new tariff framework, officials aim to balance consumer costs, energy demand changes, and the financial stability of the power sector.
