Electricity Consumers to Get Relief
Staff Report:
ISLAMABAD: The electricity consumers are likely to get relief in electricity rates due to reduction in base tariff.
It was discussed during a public hearing held Thursday at the National Electric Power Regulatory Authority (NEPRA).
The hearing, chaired by NEPRA Chairman Waseem Mukhtar, examined a government petition projecting a drop in the estimated power purchase price.
Officials informed the regulator that the average power purchase price could fall from Rs27 in the current fiscal year to between Rs24.75 and Rs26.22 in FY2025–26. This reduction could result in consumer savings ranging from Rs140 billion to Rs400 billion, depending on economic and fuel cost scenarios.
The per-unit tariff for consumers is expected to fall by approximately Rs2, while electricity demand is projected to grow between 2.8 per cent and 5 per cent. These estimates are based on a projected dollar rate of up to Rs300 for the upcoming year.
NEPRA’s case officer briefed the authority that the petition concerns projections for the power purchase price for the upcoming fiscal year. Various demand and fuel price scenarios suggest that the average per-unit consumer price could range between Rs6.8 and Rs8.1.
If fuel prices increase significantly, the total fuel cost could reach Rs1.28 trillion. Officials emphasized that inflation, the dollar exchange rate, and interest rates heavily influence these projections. Lower demand combined with high fuel costs could drive prices higher, they warned.
Despite these risks, some projections point to as much as a 24% decline in electricity prices compared to the current fiscal year. Meanwhile, transmission losses for the National Transmission and Despatch Company (NTDC) are expected to remain stable at 2.80%.
During the hearing, NEPRA raised concerns about the Power Division’s claim that demand for electricity is expected to rise. Chairman NEPRA Waseem Mukhtar questioned the assumption, pointing out that electricity demand has declined in recent years.
The ministry defended its position, stating that the projected increase is based on anticipated GDP growth and the positive impact of recent tariff reductions. They said that electricity demand increasing and noted that industries are beginning to return to the national grid due to more competitive power prices.
The Ministry also shared its fuel price assumptions for the next fiscal year. The cost of natural gas used for power generation is estimated at Rs1,050 per MMBTU.
Thar coal is expected to be priced at $20 per ton from July to September and drop to $18–$19 per ton from October through June. Imported coal (API 4) is projected to stay at $100 per ton, while ICI 3 and ICI 5 varieties are expected to cost $74 and $35 per ton, respectively. Brent crude oil is forecast at $74 per barrel until January 2026 and $72 per barrel from March to June.
Furnace oil prices are expected to remain at $522 per ton from July to December and slightly lower at $508 per ton from January to June. High-speed diesel is projected to maintain a price of Rs264 per liter throughout the year.
The Ministry said that, according to IMF estimates, GDP growth is expected to reach 3.6% in 2026. Based on this, electricity demand in 2025–26 could increase by 2.8% to 5%, with total demand on the 132kV grid likely to fall between 128,000 million and 131,000 million units.
Officials noted that demand sharply declined in 2023, recovered somewhat in 2024, and is expected to continue growing in the years ahead if tariffs remain affordable and stable.
