• Proposes fixed monthly electricity charges of Rs200-675 for over 28.5m households
• Aims to raise Rs125bn to fund Rs4.04-per-unit relief for industry
• Nepra okays fuel adjustment; Feb bills to rise by Rs1.21 per unit
ISLAMABAD: The government has proposed imposing a monthly fixed charge of between Rs200 and Rs675 on more than 28.5 million residential electricity consumers to raise around Rs125 billion and fund a relief package of Rs4.04 per unit for industrial users.
The revised Schedule of Tariff (SoT) was submitted to the National Electric Power Regulatory Authority (Nepra) on Friday evening and was immediately put on notice for a customary public hearing on the first available date after the weekend for immediate implementation within the current month.
“This is just a procedural formality. The government guidelines are binding on Nepra,” an official said when asked about a short notice for a public hearing.
The power division told Nepra that the imposition of a fixed charge on almost all residential consumers (barring lifeline users permanently using less than 100 units per month) was approved by the federal cabinet on Feb 4.
The change in SOT comes in less than three weeks after the government had notified the base national average tariff on Jan 12 for application with effect from Jan 1, denying a benefit to consumers of about 62 paise per unit reduction determined by the regulator.
The new fixed charge would generate about Rs106bn in tariff, besides about Rs19bn in sales tax, to slash cross-subsidy by industrial consumers with a Rs4.04 per unit tariff cut without affecting federal budget subsidy targets committed to the International Monetary Fund (IMF).
Under the decision, a Rs200 per month fixed amount would be charged to about 9.9m consumers using less than 100 units and Rs300 on more than 6.1m users consuming less than 200 units per month in the protected category.
They must maintain their consumption within these limits to qualify their average unit price at Rs10.54 and Rs13 for a continuous six months, respectively.
For non-protected consumers who exceed the 100-unit threshold even once in six months, a fixed charge of Rs275 would apply to about 5.7m users, whose per-unit rate would rise above Rs22.44, excluding taxes.
The second slab of 200 units would attract a Rs300 per unit fixed charge and would affect around 2.24m consumers.
The fixed monthly charge would increase to Rs350 for 2.9m consumers using 201-300 units, while around one million people consuming 301-400 units would pay Rs400 per month.
Around 400,000 consumers using 401-500 units would be charged Rs500 and all above 501 units per month would swallow a bitter pill of Rs675. About 0.41m consumers fall in this category.
The power division said the fixed charge emanated primarily from fixed costs of the power system amid changing consumer behaviour.
“It has become necessary to rationalise the tariff structure” in view of the existing structural misalignment between the determined revenue requirement of the power sector, where a substantial portion comprises fixed costs, and the predominantly volumetric recovery mechanism under the current tariff, coupled with the significant expansion of off-grid solar.
“The present volumetric tariff framework has placed a disproportionate recovery burden on other consumers, leading to increased cross-subsidisation and migration to alternative energy solutions,” the power division said.
Therefore, while remaining within the determined revenue requirement and approved subsidy limits, a recalibration of fixed and variable charges had been approved by the cabinet to ensure equitable cost recovery and long-term financial sustainability of the grid.
“Accordingly, the fixed charges for all domestic consumers, except lifeline consumers, are introduced/revised,” the power division said, adding that this was being done without changing the targeted tariff differential subsidy of Rs249bn.
Fuel adjustment
This coincided with a simultaneous notification issued by Nepra allowing a net fuel cost increase of about Rs1.21 per unit in February billing when compared to January.
The regulator said in its notification that it allowed “positive fuel cost adjustment (FCA) for December 2025, i.e. Rs0.2841/kWh” for recovery in February billing, which will apply to all the consumer categories of KE and other Discos, except lifeline consumers, electric vehicle charging stations and pre-paid electricity consumers of all categories.
A government official said that since a negative FCA of 93 paise had expired and would be replaced by a positive FCA, the net comes to about Rs1.21 per unit.
The power division reported last month that the number of poor and subsidised consumers more than doubled to 21m in three years, eating up an otherwise 62 paise per unit reduction in national average electricity rates due from Jan 1 for the current year.
The decision was criticised by multiple businesses, including representatives of the textile industry and the Federation of Pakistan Chambers of Commerce and Industry.
As a follow-up, the prime minister subsequently announced that the export sector’s tariff would be slashed by Rs4.04 per unit.
Under the government decision, the tariff rebasing would now take place on a calendar year basis (on Jan 1 every year) instead of a fiscal year to reduce the impact of tariff increases coinciding with high consumption months, starting July 1.
Total determined revenue requirement for Discos for the current year stands at Rs3.379 trillion, with an amount of Rs249bn on budget subsidy.
Published in Dawn, February 7th, 2026
