By Staff Reporter
ISLAMABAD: The government is pushing ahead with a plan to slap monthly fixed charges on millions of residential electricity users, aiming to generate about Rs125 billion to underwrite a tariff cut for hard-pressed industries without busting its budget commitments to the International Monetary Fund, dawn newspaper reported on Saturday.
The Power Division submitted a revised tariff schedule to the National Electric Power Regulatory Authority late on Friday, setting the stage for a public hearing early next week and swift implementation this month.
The charges, ranging from Rs200 to Rs675 a month, would hit more than 28.5 million households, sparing only lifeline users who consistently consume under 100 units per month. “This is just a procedural formality. The government guidelines are binding on Nepra,” one official said, speaking on condition of anonymity as the matter is under review.
The cabinet greenlighted the move on Feb. 4, barely three weeks after notifying a base national average tariff on Jan. 12 that took effect retroactively from the start of the year. That earlier adjustment had bypassed a 62-paise-per-unit reduction flagged by the regulator, effectively keeping rates steady for consumers amid surging subsidies.
Under the latest tweak, the fixed fees are projected to rake in roughly Rs106 billion in direct tariff revenue, plus another Rs19 billion in sales tax. The windfall would finance a 4.04-rupee-per-unit rebate for industrial users, dialling back cross-subsidies without touching the Rs249 billion in targeted fiscal support pledged to the IMF.
Breaking it down by consumption slabs, about 9.9 million protected users burning less than 100 units monthly would face a Rs200 fixed hit, while over 6.1 million in the under-200-unit bracket get tagged with Rs300. To stay qualified for protected rates of Rs10.54 and Rs13 per unit, respectively, these households must hold their usage steady over six straight months.
For non-protected consumers who slip above 100 units even once in that period, the sting ramps up: 5.7 million such users would pay Rs275 rupees, pushing their effective rate beyond Rs22.44 per unit before taxes. The 200-unit slab draws a Rs300 charge for around 2.24 million customers, escalating to Rs350 for 2.9 million in the 201-300 unit range.
Higher brackets fare worse — 1 million users in the 301-400 unit category face Rs400 monthly, 400,000 in 401-500 units pay Rs500, and the top tier above 501 units swallows Rs675, affecting about 410,000 households. The Power Division framed the overhaul as a response to entrenched mismatches in the grid’s cost structure. “It has become necessary to rationalise the tariff structure” given fixed costs dominating the sector’s revenue needs, against a backdrop of mostly volume-based billing and a boom in off-grid solar adoption, the division said in its submission. “The present volumetric tariff framework has placed a disproportionate recovery burden on other consumers, leading to increased cross-subsidisation and migration to alternative energy solutions,” it added.
The rejig stays within approved revenue targets and subsidy caps, aiming for “equitable cost recovery and long-term financial sustainability of the grid.” Accordingly, fixed charges are being introduced or hiked for all domestic users except lifeliners, without altering the 249 billion-rupee subsidy envelope. The timing dovetails with Nepra’s separate nod for a net fuel cost hike of about Rs1.21 per unit in February bills, compared to January. The regulator cleared a positive fuel adjustment of 0.2841 rupees per kilowatt-hour for December 2025 consumption, applicable to most categories except lifeliners, EV chargers and prepaid users. With a prior negative adjustment of 93 paise lapsing, the net bump lands at Rs1.21, per a government official.
This follows last month’s disclosure that subsidised consumer ranks have ballooned to 21 million over three years, more than double prior levels, gobbling up what could have been a 62-paise cut in average rates from Jan. 1. The initial tariff holdback drew fire from business lobbies, including textile exporters and the Federation of Pakistan Chambers of Commerce and Industry. In response, the prime minister pledged the Rs4.04 industrial relief, now funded via these residential fees.
Looking ahead, tariff rebasing will shift to a calendar-year cycle starting Jan. 1 annually, ditching the fiscal-year July 1 kickoff to blunt spikes during peak summer demand. For the current year, discos’ total revenue requirement clocks in at Rs3.379 trillion, backed by the Rs249 billion subsidy.
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