Member Nepra Opposes Cross Subsidy for EVs

Staff Report:
Member Technical National Electric Power Regulatory Authority (Nepra) has opposed the cross subsidy of Rs 10 per unit for electric vehicles in Pakistan.

In a Dissenting Note, Member Technical Nepra said that he recognized the importance of promoting the adoption of electric vehicles (EVs) in Pakistan as part of our broader goal for sustainable energy.

I must respectfully dissent from the majority decision to impose the financial burden of subsidizing EV charging stations on the general consumer base,” he said adding that in his view, it is inequitable to shift the cost of incentivizing one sector onto all consumers, particularly when a significant portion of the population neither has access to nor the ability to utilize EV technology.
He added that subsidies should be funded through mechanisms that do not impose an undue burden on existing consumers, such as government grants or external funding sources.

“I firmly support a Cost of Service Tariff structure, and any subsidy provisions should be limited to assisting low-income residential consumers, rather than being broadly allocated to incentivize specific businesses or consumer categories.” He said adding that he respectfully dissents from the majority decision, as a matter of principle.

Subsidy
The Federal Government through its Motion dated 24.01.2025 conveyed Policy Guidelines for rationalization of Tariff for Electric Vehicle Charging Stations (EVCS). The general provisions of the Policy Guidelines.
It had proposed to rationalize the base rate of Rs.23.57/kWh for EVCS to meet the EV policy target set by GoP by 2030.

The government proposed to manage the difference between the proposed and existing base tariff through a cross-subsidy mechanism.

It proposed to remove a capped Rs. 24.44/kWh margins and said that EV market would determined it.

The Ministry in the Motion submitted that the global transition towards sustainable energy underscores the critical importance of advancing the adoption of electric vehicles (EVs).

It also submitted that according to the Federal government’s SRO Nos. 1025-1035 (1)/2024 dated
July 12, 2014 read with SRO 1039 (1)/2024 dated July 14, 2024, the tariff for Electric Vehicle Charging Stations (EVCS) falls under the commercial category, with a base rate of Rs.45.55/kWh.

This base rate includes a cross-subsidy of approximately Rs.10/kWh and the final tariff would go up to Rs 71 per unit after incorporating 43% taxes.