In a move aimed at cushioning its citizens against mounting inflationary pressures, Pakistan has announced a nationwide cut in electricity tariffs by PKR 1.55 per unit.
The revised pricing effective from May to July 2025, is expected to offer an economic reprieve worth PKR 52.6 billion to residential and commercial consumers alike. The measure has been rolled out as part of the third quarterly adjustment for the fiscal year, sanctioned by the National Electric Power Regulatory Authority (NEPRA).As the country continues to wrestle with economic instability, including spiralling fuel costs and fiscal deficits, this price revision offers timely relief. The adjustment comes on the heels of a PKR 1.71 per unit tariff reduction earlier this year for April through June, reinforcing the government’s stated commitment to dampening inflationary trends and making energy more affordable.
NEPRA attributed the tariff cuts to improved operational efficiencies and strategic reforms in the power sector. The authority has cited increased accountability, refined cost structures, and optimisation across transmission and distribution channels as key enablers. These reforms, it said, have contributed to the viability of lowering costs without compromising supply or sustainability targets.The relief will, however, exclude lifeline electricity consumers, who fall under subsidised categories and are already charged lower tariffs. For the rest, the adjustment will reflect automatically in upcoming monthly billing cycles. This aligns with the government’s broader fiscal strategy to recalibrate subsidies and reduce the budget deficit, while continuing to prioritise middle and lower-middle-income segments.
In parallel, a landmark structural reform has been introduced in the power market with the licensing of the Independent System and Market Operator (ISMO). This newly instituted body will take over key responsibilities from the Central Power Purchasing Agency. The formation of ISMO is being heralded as a step towards a competitive and transparent electricity marketplace, which could further help in managing demand, improving grid reliability, and attracting green energy investments.With the global shift towards energy transition and sustainable power management, this move could mark a pivotal moment for Pakistan’s decarbonisation roadmap. Analysts suggest that lower electricity tariffs not only mitigate short-term consumer distress but also set the tone for longer-term sectoral reforms, paving the way for investments in renewable energy, grid upgrades, and digitisation.As households and businesses begin to benefit from lower costs, the challenge for the state remains balancing affordability with sustainability. This delicate equilibrium will define Pakistan’s journey toward building an equitable, resilient, and low-carbon power infrastructure.
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