Islamabad, Aug 4, 2025: Electricity prices in Pakistan are expected to increase by 25% over the next eight years, as per a forecast shared by the Power Division. This projection follows a steep 50% rise in electricity tariffs over the last three years.
The average power rate is expected to hit Rs. 29.70 per unit by 2034, compared to the existing Rs. 24 per unit, according to a recent document distributed among stakeholders.
A major factor behind the increasing electricity prices has been the sharp devaluation of the Pakistani rupee. This depreciation has driven inflation and inflated the cost of power purchases. Between FY2022 and FY2025, the average electricity rate jumped nearly 50%, rising from Rs. 16.77 to Rs. 24.88 per unit.
A key contributor to this surge is the 115% hike in capacity charges, which soared from Rs. 971 billion to Rs. 2.1 trillion. Even though energy payments dipped slightly, the hike in capacity costs has led to an overall tariff increase.
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Due to exchange rate losses, the base tariff rose by 44% in rupee terms despite staying largely constant in dollar value. Meanwhile, fuel charges remained steady due to the addition of more cost-efficient power sources. However, the government has emphasized the need to cut dependence on imported fuels and boost domestic energy production.
Higher electricity costs have hurt industrial output, lowering consumption from 34 billion units in FY2022 to 28 billion in FY2024. A shift toward clean energy, expected to reach 66% of total generation by 2034, may help ease future price hikes.
