Islamabad, Apr 5, 2025: In a significant move toward lowering electricity costs, the National Electric Power Regulatory Authority (NEPRA) announced on Friday that consumers will begin receiving a reduction of Rs 5.03 per unit in their power bills within the coming days.
The relief, part of a broader initiative to implement Prime Minister Shehbaz Sharif’s announced tariff cut of Rs 7.69 per unit for industrial users and Rs 7.41 for household consumers (excluding lifeline categories), is currently being finalized by the Authority.
Presiding over a public consultation, National Electric Power Regulatory Authority (NEPRA) Chairman Waseem Mukhtar confirmed that the process is progressing steadily.
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He noted that while an initial relief of Rs 5.03 per unit will be applied promptly, the remainder of the relief package will be incorporated into the third quarter’s Quarterly Tariff Adjustment (QTA).
The government had earlier submitted a motion seeking a Rs 1.71 per unit reduction due to an additional Rs 58.6 billion in petroleum development levy (PDL), aimed at easing the burden over a three-month window.
With this amount added, the total subsidy allocation has now surged to Rs 266 billion, according to Additional Secretary of the Power Division, Mahfouz Bhatti.
Deputy Director of CPPA-G, Naveed Qaiser, explained that this reduction comprises several components: savings from renegotiated Independent Power Producers (IPPs) contracts.
The recent PDL accumulation, and adjustments under the QTA mechanism. A fixed amount of Rs 1.50 per unit is attributed to the PDL tax.
Industrial representative Aamir Sheikh welcomed the tariff reduction but sought clarity regarding the exact breakdown.
He emphasized that understanding whether QTA relief of Rs 1.9 per unit and negative adjustments like Rs 0.90 from the Fuel Price Adjustment (FPA) would be included this quarter or the next is crucial for planning, especially for exporters.
He pointed out that since FPA is variable, only fixed relief components can be factored into long-term industry pricing.
Tanveer Barry, representing the Karachi Chamber of Commerce, also lauded the tariff cut but raised concerns regarding the inclusion of Targeted Development Subsidy (TDS) and quarterly adjustments in the Prime Minister’s relief package.
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Responding to these concerns, Chairman National Electric Power Regulatory Authority (NEPRA) confirmed that the Authority has approved the transfer of Rs 0.90 per unit in negative FCA (Fuel Charges Adjustment) to consumers for the April–June 2025 period.
This benefit stems from Rs 23 billion in unpassed FCA amounts between July 2024 and February 2025.
These amounts, previously adjusted in subsidy claims of distribution companies (Discos), will now directly benefit non-lifeline and unprotected consumers.
The Rs 0.90 per unit reduction will be spread over the projected sales for April to June 2025. National Electric Power Regulatory Authority (NEPRA) also mentioned that any discrepancy in recovery will be addressed in future tariff petitions filed by Discos.
This development arrives as the power sector grapples with a growing circular debt, now nearing Rs 2.4 trillion. Speculation persists about the government resorting to bank loans or imposing additional surcharges to manage the fiscal strain.
