- Tariff fell led by the renegotiations IPP.
- Electricity prices facilitate the change of grid.
- Govt to approve the proposed pricing cut of exercise 26.
Islamabad: providing significant relief to electricity consumers and companies, the National Electric Power Regulatory Authority (NEPRA) has reduced the basic power rate of RS1.49 per unit for financial year 2025-26, which reduces it to RS34.01 / Unit – A 4.2% drop in the current rate of RS35.50 / unit.
Decreased revision follows lower capacity payments thanks to new government agreements with independent electricity producers (PPI), a drop in energy prices and a planned increase of 2.8% of demand.
The NEPRA has sent its rebasing decision to the federal government for the final approval and the implementation of a uniform rate.
For exercise 26, the regulator has authorized a total income requirement of 3.52 rumbox billions for old WAPDA distribution companies (XWDISCOS), comprising 3.07 billions of electricity purchase price (PPP) and 454 billion rupees in distribution margins and systems loss.
In particular, the government had increased the basic rate by 5.72 rupees per unit (19.2%) to RS35.50 / unit during financial year 25 – making current reduction a potential break for businesses and households. The NEPRA attributes softening prices with improved macroeconomic indicators and a significant change in captive industrial users to the national grid.
However, challenges remain. Imported coal -fired power plants should operate at only 24% of the ability of fiscal year 26, but give a high cost of RS61.43 / unit due to high dollar yields on equity (27.45%). Meanwhile, the LNG (RLNG), which has been restarted – resulting from industrial change – reached 450 mmcfd, resulting in a hrs of RS300 billion because it is redirected to residential use.
On the total PPP, 1.94 Billion of rupees – more than 63% – is allocated to capacity costs, while 1.13 Billion of rupees for fuel and variable operating costs. The capacity costs alone translate into 6,484 rupees per unit per month, on the basis of an average monthly request of 24,943 MW.
The average PPP per unit for xwdiscos before transmission and distribution (T&D) loss adjustment is estimated at RS26.34 / Unit – including RS16.67 / Unit in capacity and RS9.67 / Unit in energy costs. Including the part of K-Electric, the Middle National PPP is at RS25.98 / Unit, the cost reduced to discos under the prescribed mechanism.
The data show that this surplus has slowed down production from fields of key interior gas, which increases dependence on raw oil imports. Composing the problem, hydroelectric production should drop 18% in annual sliding due to the reduction of water flows, the more inclination of the generation mixture to more expensive thermal sources.
While a transmission line of 900 MW from south to north established for completion by August 2025 could reduce the bottlenecks, structural reforms remain crucial to reach sustainable sector gains.