NEPRA Slashes Pakistan’s Base Power Tariff by Rs 1.49 for FY26
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Islamabad – In a move poised to ease the financial burden on consumers, the National Electric Power Regulatory Authority (NEPRA) has reduced the base electricity tariff by Rs 1.49 per unit for the upcoming fiscal year 2025-26 [[1]]. This adjustment lowers the tariff from Rs 35.50 per unit in FY25 to Rs 34.01 per unit [[2]].
Details of the Tariff Reduction
NEPRA’s spokesperson, Safeer Hussain, confirmed that the proposal has been submitted to the federal government for approval [[1]].The tariff revision comes after the government sought adjustments to the base electricity rate, proposing reductions ranging from 30 paise to Rs 2.25 per unit under various economic scenarios.
Did You Know? The last time NEPRA approved an increase in base electricity tariff was July 2024, hiking it by Rs 7.12 per unit [[3]].
Factors Influencing the Final Electricity Price
the ultimate cost of electricity for consumers will depend on several factors, including the Power Purchase Price (PPP), fuel costs, and additional taxes, fees, duties, and surcharges. The average PPP is projected to add between Rs 8.16 and rs 9.52 per unit, perhaps bringing the total electricity price to between Rs 34 and Rs 35 per unit before taxes [[1]].
Electricity demand is projected to grow between 3% and 5%, contingent on a stable exchange rate of rs 280 against the dollar. However, projections also consider scenarios with a depreciated exchange rate of Rs 300 [[1]].
Key economic Indicators Considered
NEPRA’s determination factors in several key economic indicators:
- US inflation at 2%
- pakistan inflation at 8.65%
- Karachi Interbank Offered Rate (KIBOR) at 11.9%
- International interest rate at 4.07%
- transmission losses at 2.80% [[1]]
Next Steps and Implementation
The federal cabinet will review NEPRA’s decision for approval and subsidy allocation. Following this, the power division will submit a revised tariff table to NEPRA, incorporating subsidies for different consumer categories, before the official notification takes effect on July 1. This timeline aligns with commitments made to the International Monetary Fund (IMF) [IMF].
Pro Tip: Keep an eye on exchange rate fluctuations, as these can significantly impact the final electricity costs.
Impact on Consumers
The reduction in the base tariff offers a glimmer of hope for consumers grappling with rising living costs. However, the actual impact on monthly bills will depend on the interplay of various factors, including fuel price adjustments and government subsidies.
| Metric | Value |
|---|---|
| Base Tariff Reduction | rs 1.49 per unit |
| New Base Tariff (FY26) | Rs 34.01 per unit |
| Previous Base Tariff (FY25) | Rs 35.50 per unit |
understanding Electricity Tariffs in pakistan
Electricity tariffs in Pakistan are a complex issue, influenced by a mix of factors ranging from global fuel prices to government policies and international agreements. The base tariff represents the fundamental cost of generating and transmitting electricity, while additional charges cover fuel adjustments, taxes, and subsidies. NEPRA plays a crucial role in regulating the power sector, ensuring fair pricing and reliable service for consumers.
historically, Pakistan’s power sector has faced challenges related to inefficiency, transmission losses, and circular debt.Efforts to reform the sector and attract investment are ongoing, with the goal of providing affordable and sustainable electricity to all citizens.
Frequently Asked Questions About Electricity Tariffs
How ofen does NEPRA revise electricity tariffs?
NEPRA typically reviews and adjusts electricity tariffs on a regular basis,taking into account changes in fuel prices,economic conditions,and government policies.
What is the Power Purchase Price (PPP)?
The Power Purchase Price (PPP) represents the cost of purchasing electricity from generating companies. This cost is a significant component of the overall electricity tariff.
How can consumers reduce their electricity bills?
Consumers can reduce their electricity bills by adopting energy-efficient practices, such as using energy-saving appliances, turning off lights when not needed, and optimizing air conditioning usage.
Will this tariff reduction provide significant relief to consumers? How can Pakistan ensure affordable and sustainable electricity for the future?
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