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ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday approved Rs1.71 per unit subsidy on average tariff for consumers of all distribution companies, including K-Electric, for three months (April to June).
The Rs58.6 billion subsidy would be funded through Rs10 per litre petroleum levy on petrol and diesel imposed by the federal government on March 15.
“The request of the Ministry (of Energy) to provide additional subsidy of Rs.1.71/kwh to all consumers of XWDISCOs and K-Electric (except lifeline consumers) for the period from April 2025 to June 2025 is hereby approved,” read an order issued by the regulator.
It said the ministry had not requested for any change in the Nepra’s determined tariff or revenue requirement of Discos, rather had decided to use the petroleum development levy (PDL) to provide additional subsidy to all consumers across the country, except lifeline consumers.
Base national tariff to come down to Rs31.20/unit excluding taxes, duties and surcharges
It said the federal cabinet had taken a decision on March 26, as part of the government’s “efforts to reduce consumer-end tariff and improve demand”.
Nepra had determined the average rate for FY25 at Rs35.50 per unit. The government had notified the national average tariff of Rs32.99 per unit from October 2024 onwards with a Rs2.51 per unit tariff differential subsidy out of the taxpayer’s money. After fresh notification, the base national tariff would come down to Rs31.20 per unit for three months, excluding almost a dozen taxes, duties and surcharges.
It was not yet clear if the Rs1.71 per unit subsidy would continue after June 30, as the government did not make any commitment to the regulator. “The MoE explained that expected PDL collection for the FY2025-26, would be considered at the time of annual rebasing of tariff for the FY2025-26, after approval of the cabinet,” the regulator said.
The MoE reported that the government had allocated around Rs266bn subsidy for the FY2024-25, which after inclusion of the currently proposed relief of Rs58.6bn at the rate of Rsl.7l per unit, would become Rs325bn. However, the category-wise relief would be different depending upon applicable taxes for the relevant category.
The petroleum levy on petrol and diesel was increased by Rs10 to a maximum of Rs70 permissible under the Finance Act 2025 to divert the revenues towards maximising relief in power tariffs.
Published in Dawn, April 11th, 2025
