The federal government has asked the National Electric Power Regulatory Authority (Nepra) to ensure uniform electricity tariff rate across the country, including the territory of K-Electric (KE).
This will be achieved via incorporating subsidies, surcharges and inter-disco tariff rationalisation from July 1, 2025.
The Power Division in its motion has referred to tariffs for Discos announced by Nepra on June 23, 2025, in which the national average tariff has been reduced to Rs34 per unit for 2025-26 from Rs35.50 per unit of FY2024-25.
Nepra will hold a public hearing tomorrow (July 1) on the federal government’s motion for uniform tariffs across the country, including for KE’s service territory.
The Power Division is of the view that the inter-distribution companies’ tariff rationalisation is not aimed at raising any revenues for the federal government, as it is within the determined revenue requirements of the Discos consolidated in terms of Section 31 (4) of the Act.
The tariff rationalisation enables the fulfilment of parameters set forth in the Constitution as well as the policy.
“Once considered and approved, the same will lead to the determination of ‘uniform final tariff’, in terms of Section 31(7) of the Act, for notification by the federal government with effect from July 1, 2025, to the extent of modification of existing rates notified on July 14, 2024, read in conformity with earlier issued applicable notifications,” said Power Division in its motion.
As per the policy, the government may maintain a uniform consumer-end tariff for KE and state-owned distribution companies (even after privatisation) through incorporation of direct and indirect subsidies.
Accordingly, KE applicable uniform variable charge is required to be modified to recover the revenue requirements of KE determined by Nepra keeping in view the proposed targeted subsidy and cross subsidies, which will also be consistent with the proposed uniform national tariff of Discos.
This has also been submitted for the approval of the federal government and in anticipation of the approval, the same is submitted to the authority for consideration in terms of the provisions of the Act.
The federal government has reduced subsidies for the power sector by 13% to Rs1.036 trillion for FY2025-26 from Rs1.190 trillion for FY2024-25.
The amount of subsidy for Inter-Disco tariff differential has been slashed to Rs249.136 billion for 2025-26 from allocation of Rs276 billion for FY2024-25, showing a reduction of 9.8%.
Subsidy for tariff differential to agri tubewells in Balochistan will be Rs4 billion in 2025-26 from Rs9.5 billion in 2024-25.
The amount of subsidies for merged districts of KP erstwhile Fata has been reduced over 38% to Rs40 billion for FY 2025-26 from Rs65 billion for FY2024-25.
The government has also slashed the amount of subsidy for AJK by 31.5% to Rs74 billion for 2025-26 from Rs108 billion for FY2024-25.
The amount under the Pakistan Energy Resolving Fund (PERA) will remain at Rs48 billion for FY2025-26 like FY2024-25.
This amount is meant to pay Rs5 billion every month to Chinese IPPs established under the China-Pakistan Economic Corridor (CPEC).
For KE, the amount of subsidy has been reduced over 28% to Rs125 billion for FY2025-26 from Rs174 billion for FY25, however, Rs 1 billion has been allocated as subsidy for agriculture tube-wells in Balochistan for FY2025-26 against Rs500 million for FY25.
After explaining the background, Power Division has stated that a motion is being filed by the federal government with respect to consumer end-tariff recommendations of Discos under Section 7 and 31 of the Act read with Rule 17 of the rules, so as to reconsider and issue the uniform schedule of tariff of Discos, by incorporating targeted subsidy and territory of KE pursuant to guidelines for the category of each of Nepra determined notified rate (inclusive of subsidy/tariff rationalisation surcharge/ inter disco tariff rationalisation).
The motion is also being filed by the federal government with respect to Consumer end Tariff Recommendations of KE, under Sections 7, 31 (4) and 31 (7) of the Act read with Rule 17 of the Rules, so as to reconsider and issue for KE, modified uniform variable charge, to maintain uniform tariff across the country, so as to recover the revenue requirements of KE determined by the authority, keeping in view the proposed targeted subsidy and cross-subsidies.
The authority is, accordingly, requested to issue a revised schedule of tariff after incorporating tariff rationalisation to be notified with effect from July 1, 2025, in the official gazette by way of modification in SRO No. 575(1)/2019 as modified from time to time.
The federal government considered the schedules of tariff recommended by Nepra for each Disco for all categories of consumers dated June 23, 2025, and decided that as per the policy, the uniform tariff should be made applicable per the provisions of section 31 (4) of the Act.
Accordingly, the uniform tariff, being reflective of the economic and social policy of the federal government and based on the consolidated revenue requirement approved and determined by the authority for discos (owned and controlled by the federal government), has been submitted for consideration and approval by the cabinet on June 28, 2025, and in anticipation of the approval, the same is submitted to the authority for consideration in terms of section 31 of the Act along with the targeted tariff differential subsidy.