Electricity likely to get 4.2% cheaper in Pakistan in FY26

Electricity is likely to get 4.2% cheaper in Pakistan in fiscal year 2025-26 (FY26) primarily due to a reduction in capacity purchase payments, according to officials of the National Electric Power Regulatory Authority (NEPRA).

The regulator has approved a PKR 1.5 per unit reduction in the base electricity tariff, bringing it to PKR 34 per unit in FY26 compared with PKR 35.5 in FY25. Last year, the base tariff had been increased by PKR 5.71 per unit.

NEPRA recently sent its decision on power distribution companies' multi-year tariff petitions to the federal government.

The federal government will decide how much subsidy to offer and then issue a notification about the new base electricity tariff that will be applicable from July 1.

Sources told Nukta that if the reduction is approved by the federal government, a household consuming 300 units per month would see their monthly bill slashed by PKR 450, a household consuming 500 units by PKR 750, and a household consuming 1,000 units by PKR 1,500.

However, the actual impact depends on any additional adjustments or quarterly fuel charges that may offset the reduction.

Moreover, the federal government's decision will determine how much of the cut is passed on to consumers.

Revenue requirement

Separately, NEPRA approved a revenue requirement of PKR 3,520 billion for power distribution companies for the upcoming fiscal year.

The estimated cost of electricity purchase for the next fiscal year is PKR 3,066 billion.

An amount of PKR 454 billion has been approved under the head of profits and losses for electricity companies.

An estimated PKR 1,940 billion is expected to be required for capacity payments, market operation fees, and use-of-system charges during the next fiscal year.