Pakistan Announces Reduction in Electricity Tariffs for Consumers
Electricity tariffs for consumers of state-run distribution companies (DISCOs) and K-Electric have been reduced, bringing relief to households and businesses. The per-unit cost has been lowered by Rs1.22 for DISCOs and Rs1.23 for K-Electric under the monthly fuel cost adjustment (FCA) framework.
According to an official notification, the tariff cut for DISCOs is based on December’s FCA, while K-Electric’s adjustment reflects November’s FCA. The revised rates will be applied to electricity bills issued in February.
During a regulatory hearing led by NEPRA’s chairman, the power division revealed that electricity providers had requested Rs52.12 billion in consumer relief under quarterly adjustments. Officials cited a 7% rise in industrial electricity consumption in December and cost reductions from terminating contracts with five thermal power plants as key reasons for the tariff decrease.
Additionally, a stable exchange rate and loan restructuring for the K-2 and K-3 nuclear power plants contributed to lower electricity costs. The non-operational status of the Neelum-Jhelum hydropower plant also influenced financial adjustments.
Despite this relief, the ongoing issue of circular debt remains a challenge. The Central Power Purchasing Agency (CPPA) reported that interest payments on circular debt alone are adding Rs2.83 per unit to electricity costs, with the total circular debt reaching Rs2,384 billion.
