Govt hints at new power tariff package as demand falls

• Consumers may face Rs1.20 per unit additional fuel cost in August bills• Nepra questions performance of power sector entities• Regulator criticises excessive, revenue-based loadshedding• Concerns raised over outages at three nuclear power plants ISLAMABAD: With electricity demand declining by over three per cent, the government on Wednesday indicated that it was working on another power tariff package as it sought about Rs1.20 per unit additional fuel cost from consumers to collect Rs15.7 billion in August for electricity consumed in June. At a public hearing, the Nat­i­onal Electric Power Regul­atory Authority questioned the performance of power sector entities and the policy of excessive loadshedding. Continuous system constraints limiting the utilisation of cheaper available capacity also came under criticism, while some commentators exp­re­ssed concern over outages at three nuclear power plants. The government team, comprising representatives of the power division and its entities, reported that electricity consumption in June was around 5pc lower than estimates for the month and about 3.3pc lower than the same month last year. Total units sold in June this year stood at 9.995bn units compared to 10.337bn units in the same month last year. They said that, barring 2.8pc growth in industry, the reduction in consumption was across the board, ranging from 3.5pc to 5pc in the domestic and commercial sectors and 12pc to 29pc in agriculture and bulk consumers. It was reported that non-availability of Qatar’s contra­cted LNG led to expensive purchases from the spot market and minor use of furnace oil, resulting in higher fuel cost. Nepra’s Member Develop­ment Maqsood Anwar Khan expressed concern over rep­orts of protests in various parts of the country against excessive loadshedding while government companies were reporting a decline in demand. He also criticised commercial loadshedding. Power companies confirmed that loadshedding was carried out for four days in June, ranging from 93MW to 730MW, while revenue-based loadshedding remained on the higher side. They said the reduction in demand had several factors, including solar net metering, transfer of Balochistan tube wells to solar, weather conditions and other reasons. Power division official Naveed Qaiser said solar switching between day and night was one of the key factors in fluctuating demand and consumption patterns. He said the government was working on a new power tariff package to address time-of-use rates, captive power plant requirements and battery energy storage systems. He said the induction of battery energy storage systems by consumers would be beneficial to the grid as well as tariff adj­u­stment, but if such systems were installed at utility scale, their fiscal impact would trans­l­ate into a slightly higher tariff. He declined to share details of the proposed tariff package, saying it was still at the working stage and would be brought before the regulator once finalised. Industrial representatives from Karachi demanded a review of the incremental tariff package, saying its impact was reportedly affecting other consumer categories, including domestic consumers. Qaiser said the incremental package had equally benefited the entire industrial sector, but he agreed that the three-year incentive package had completed six months and a data set had already been shared with Nepra for review and possible adjustments. Government representatives said Disco inefficiency costs had dropped from Rs591bn to Rs326bn in two years through a 1pc reduction in system losses. However, Nepra member Maqsood Anwar said this had been achieved through loadshedding and shutting down grid stations and transformers instead of improving governance and removing illegal connections. “The improvement could only be achieved when teams are in the field and remove kundas and theft, not through shutting down machines while people suffer in scorching heat,” he said. Industrial consumers also raised concern when the government side reported that three nuclear power plants — one in Karachi and two at Chashma — faced reactor problems. However, both Nepra and government representatives said the availability of all nuclear power plants stood at around 94pc and non-availability was within the 8pc contractual limit. Industrial consumers also criticised power companies for positive fuel cost adjustment because of unplanned technical shutdowns, dependence on high-cost furnace oil and RLNG, and non-availability of cheaper hydropower projects. Power division official Rihan Akhtar said the net increase in fuel cost adjustment would be around 86 paise per unit because an existing 34 paise FCA would come to an end and be replaced by Rs1.20 per unit in August, subject to regulatory approval. The Central Power Purchasing Agency reported that the reference fuel cost for June 2026 was set at Rs7.714 per unit, but the actual fuel cost turned out to be Rs8.9 per unit, necessitating an increase of Rs1.20 per unit in additional charges from consumers in upcoming monthly bills. Published in Dawn, July 30th, 2026