ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved fixed electricity charges ranging from Rs200 per kW to Rs675 per kW per month for domestic consumers (except lifeline users) to create fiscal space following a reduction in industrial tariffs of up to Rs4.04 per unit.
The move aims to make Pakistan’s export sector more competitive with regional economies in the international market. The revised tariff structure remains within the determined consolidated revenue requirement of distribution companies and budgeted Tariff Differential Subsidy (TDS) of Rs249 billion for calendar year 2026.
Under the new Schedule of Tariff (SOT), lifeline consumers — up to 50 units and 51-100 units — will continue to pay Rs3.95 and Rs7.74 per unit respectively, without any fixed charge. However, protected domestic consumers (1-100 units and 101-200 units) will now pay fixed charges of Rs200/kW and Rs300/kW per month. For non-protected consumers, fixed charges will range from Rs275/kW per month to Rs675/kW per month for higher consumption slabs.
In consumption slabs above 300 units, the increase in fixed charges has been partially offset by reductions in variable rates. For instance, the 301-400 unit slab has seen a cut of Rs1.53 per unit, while Time-of-Use (ToU) consumers have received a reduction of Rs4.76 per unit in their variable rate. Officials said the hike in fixed charges is expected to generate Rs132 billion in additional revenue.
Industrial consumers have received a significant reduction in variable tariffs, with rates falling from Rs29.34 per unit to Rs25.29 per unit in certain categories. Overall reductions range between Rs1 and Rs4.58 per unit depending on voltage level. Officials stated that the rationalisation has brought the average industrial tariff down to around $11.5 cents per unit to improve export competitiveness and align energy costs more closely with regional economies.
Nepra approved the federal government’s motion under Sections 7 and 31 of the Nepra Act read with Rule 17 of the Nepra Tariff Rules 1998. The revised uniform tariff applies to all state-owned distribution companies (XWDiscos) and K-Electric and will be notified by the federal government under Section 31(7) of the Act.
The regulator noted that nearly 73 percent of the power sector’s total cost structure consists of fixed costs — including capacity payments to power producers and transmission infrastructure expenses — while more than 93 percent of revenue has historically been recovered through per-unit (volumetric) billing. This structural mismatch, coupled with declining grid consumption due to rapid rooftop solar adoption, has increased cross-subsidisation pressures on remaining consumers.
To address this imbalance, the tariff structure shifts a greater portion of recovery toward fixed monthly charges. For non-ToU domestic consumers, fixed charges will be calculated on the basis of sanctioned load rather than actual consumption. For ToU consumers, fixed charges will apply on 50 percent of the sanctioned load or the Maximum Demand Indicator (MDI), whichever is higher — potentially increasing fixed billing for consumers with higher recorded peak demand even if their overall usage declines.
Nepra observed that the National Electricity Plan calls for progressively increasing the share of fixed charges so that they account for at least 20 percent of fixed costs. Since the revised structure remains within the approved revenue requirement and subsidy envelope of Rs249 billion, the authority stated it had no objection to approving the government’s proposal.
On the variable side, the regulator approved tariff cuts for several categories. Unprotected consumers using 301–400 units will see a reduction of Rs1.53 per unit to Rs36.46, while rates for 401-500 units will fall by Rs1.27 to Rs38.95. For 501-600 units, tariffs drop Rs1.40 to Rs40.22. Smaller cuts apply to higher slabs, with usage above 700 units reduced by Rs0.49 to Rs47.20.
Lower-usage unprotected consumers and lifeline protected users will see almost no change, with tariffs ranging from Rs3.95 to Rs33.10 per unit.
Industry will benefit most, with per-unit tariffs reduced by up to Rs4.58, effectively scrapping a Rs102 billion cross-subsidy previously paid by industrial consumers to households. Overall government power subsidies are projected to fall from Rs629 billion to Rs527 billion after the changes, Nepra said.
