Pakistan Cuts Power Tariff for FY26: Relief for Consumers and Industries
In a significant move aimed at easing inflationary pressures and encouraging industrial productivity, the Government of Pakistan has reduced the average power tariff by PKR 1.1/KWh for the fiscal year 2025–26. The National Electric Power Regulatory Authority (NEPRA) approved the changes during a hearing on July 1, 2025.
The revised rates cover all consumer categories — from residential and industrial to commercial and agricultural — as part of the annual review of consumer-end electricity tariffs.
Key Highlights for FY26 vs. FY25
- Total projected sales to DISCOs: 116.4 billion KWh
- Net distributable units after 11% losses: 103.6 billion KWh
- Total generation cost: PKR 3,066 billion (↓ 6.5% YoY)
- Total revenue requirement: PKR 3,521 billion (↓ 6.6% YoY)
- New average tariff: PKR 34.0/KWh (vs. PKR 35.5 in FY25)
Energy and Capacity Charges
- Energy Charges: PKR 1,125bn at PKR 10.87/KWh (↓ from PKR 10.94)
- Capacity Charges: PKR 1,766bn at PKR 17.05/KWh (↓ 9.5% YoY)
Reduction due to PPA terminations, tariff renegotiations, and lower interest rates.
Consumer Relief Details
🔹 Protected Residential Consumers
-
Lifeline (up to 100 units):
- 1–50 units: PKR 3.95/KWh
- 51–100 units: PKR 7.74/KWh
Flat relief of PKR 1.15/KWh for other protected slabs:
- 1–100 units: PKR 10.54/KWh (↓ 9.8%)
- 101–200 units: PKR 13.01/KWh (↓ 8.1%)
🔹 Unprotected Residential Consumers
| Units Consumed | FY26 Rate | % Change |
|---|---|---|
| Up to 100 | PKR 22.44 | ↓ 4.9% |
| 101–200 | PKR 28.92 | ↓ 3.8% |
| 201–300 | PKR 33.11 | ↓ 3.4% |
| 301–400 | PKR 38.00 | ↓ 2.9% |
| 401–500 | PKR 40.21 | ↓ 2.8% |
| Above 700 | PKR 47.69 | ↓ 2.4% |
Commercial, Industrial & Agri Tariffs
| Category | FY26 Rate | Change |
|---|---|---|
| Commercial | PKR 45.43 | ↓ 2.5% |
| General Service | PKR 43.17 | ↓ 2.6% |
| Industrial | PKR 33.48 | ↓ 3.3% |
| Bulk Supply | PKR 41.76 | ↓ 2.7% |
| Agriculture | PKR 30.75 | ↓ 3.6% |
Sectoral Breakdown of Electricity Use
- Domestic consumers: 89% of connections, 50% of consumption
- Industrial sector: 24% of electricity usage
- Agriculture: 9% of consumption
- Commercial: 8%
- Others: 10%
Conclusion
This tariff revision represents a strategic reduction across all major consumption categories, aimed at promoting affordability and industrial competitiveness. While capacity and energy charges have decreased, distribution margins and system usage costs have risen slightly. Still, the net impact is a lower electricity burden for consumers and businesses alike.
