By Staff Reporter
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) greenlit a government proposal on Thursday to slash electricity tariffs by Rs1.71 per unit for three months, from April to June 2024, tapping funds from the Petroleum Development Levy (PDL) to ease consumer costs and spur demand.
The reduction, which excludes lifeline users, extends to all customers of ex-Wapda distribution companies (XWDISCOs) and Karachi’s K-Electric.
The tariff cut forms part of a broader relief initiative unveiled earlier this month by Prime Minister Shehbaz Sharif. Following talks with the International Monetary Fund (IMF),
Sharif announced a Rs7.41 per unit reduction for households and a Rs7.69 per unit drop for industrial users. The Rs1.71 per unit slice, now endorsed by Nepra, is embedded within the domestic relief and funded via PDL collections.
Nepra conducted a public hearing on the matter on April 4, reserving its judgment at the time. On Thursday, the regulator greenlit the proposal, forwarding its decision to the government for formal notification and implementation.
“The Authority has no objection on the instant Motion, as it does not impact Nepra’s determined tariff, since the GOP [Government of Pakistan] has decided to provide additional subsidy from the expected collection of PDL [Petroleum Development Levy],” the Napra said.
“Accordingly, the request of the Ministry [of Energy] to provide [an] additional subsidy of Rs.l.71/kWh to all consumers of XWDISCOs and K-Electric (except lifeline consumers) for the period from April 2025 to June 2025 is hereby approved.”
For domestic consumers, electricity tariffs had previously stood at Rs48.70 per unit before being lowered to Rs45.05. The new reduction of Rs7.41 per unit, encompassing the Rs1.71 PDL relief, takes effect immediately. For industrial consumers, the June 2024 tariff of Rs58.50 per unit had already been reduced to Rs48.19, with an additional Rs7.69 per unit cut now in place.
The subsidy underpinning the Rs1.71 per unit reduction will be financed by an estimated Rs58.6 billion collected through the PDL over 3.5 months, according to Energy Minister Awais Leghari’s statements during the April 4 hearing. The federal cabinet had previously endorsed this plan, authorizing the Ministry of Energy to seek Nepra’s approval to pass the benefits on to consumers starting with April billing.
“The federal cabinet has approved this proposal and allowed to file the motion before Nepra so that [the] benefit can be passed on to the consumers in the billing month of April 2025,” Nepra said.
Analysts said the tariff reductions reflect the government’s efforts to ease the burden of high electricity costs on households and businesses, a key concern amid economic challenges and IMF-backed reforms. The IMF’s involvement in the broader Rs7.41 and Rs7.69 per unit cuts underscores the balancing act between fiscal discipline and consumer relief. By leveraging PDL collections, the government aims to subsidize power prices without directly straining the federal budget.
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