The government had desired a higher power tariff for the next five years in an attempt to encourage investors to participate in bidding for the sale of Fesco. PHOTO: FILE
ISLAMABAD:
The federal government is preparing a sweeping three-year power tariff relief package that could significantly reduce electricity costs for agricultural and industrial consumers, in a move aimed at stimulating production and curbing inflationary pressure.
According to official sources, the Power Division has finalised a proposal to bring down tariffs by as much as Rs14 per unit, setting electricity prices for these sectors between Rs22 and Rs23.50 per unit.
Currently, agricultural consumers are paying around Rs38 per unit, while industrial users pay Rs34 per unit.
If approved, the relief plan would take effect immediately after the prime minister’s formal announcement, expected in the coming days. The Power Division will present the package to the premier for approval before public release.
Sources confirmed that the three-year plan aims to provide “predictable and affordable” energy pricing to sectors hit hardest by high production costs. Under the proposed structure, agriculture and industry will benefit from reduced tariffs, especially on additional electricity consumption beyond standard use.
“The purpose is to boost productivity, stabilise prices, and support food security and exports,” an official explained. “The government wants to ensure these sectors can plan long-term without fear of sudden tariff shocks.”
Meanwhile, the Central Power Purchasing Agency (CPPA) has filed a separate petition with the National Electric Power Regulatory Authority (NEPRA), seeking a reduction of 37 paisas per unit in power tariffs under the monthly fuel cost adjustment (FCA) mechanism. NEPRA will hold a hearing on October 29 to decide on the proposal.
In a related development, the Power Division spokesperson welcomed NEPRA’s recent review of K-Electric’s Multi-Year Tariff (MYT), calling it a significant milestone for the power sector and particularly for Karachi’s consumers.
“The Power Division is proud to have filed this review on time and presented all arguments on merit,” the spokesperson said, adding that some quarters were misrepresenting the decision as a financial maneuver or an attempt to burden consumers.
“In reality, NEPRA’s ruling is a regulatory reform, not a financial trick,” the spokesperson clarified.
He said the review was carried out to align K-Electric’s tariff framework with those of other transmission and distribution companies, eliminating elements inconsistent with national regulatory standards, such as foreign currency-linked returns and loss allowances.
“These changes ensure that all companies are now regulated under uniform principles of recovery, performance, and transparency,” he added. “No legitimate recoveries have been curtailed, only structural imbalances have been corrected.”
Rejecting claims that the review deprived Karachi residents of any “relief”, the Power Division clarified that the MYT pertains to K-Electric’s internal revenue structure, not to the final tariff paid by consumers, which remains governed by the national uniform tariff policy.
“The perception that the decision ended or shifted the Rs7 per unit subsidy for Karachi’s consumers is entirely false,” the spokesperson said. “Subsidies remain intact under the uniform tariff regime. A reduction in subsidy means only a reduction in government expenditure, not in consumer relief.”
