The federal government has unveiled major electricity tariff relief across multiple consumer categories, aiming to ease energy costs while maintaining the base power tariff for fiscal year 2026, despite a reduction recommendation by the National Electric Power Regulatory Authority (NEPRA).
According to officials from the Power Division, electricity tariffs for the industrial sector have been slashed by 26 percent, reducing the per-unit cost from Rs. 62.99 to Rs. 46.31. The move is expected to significantly improve industrial competitiveness and reduce the cost of doing business in Pakistan.
Base Tariff Maintained Despite NEPRA Recommendation
NEPRA had earlier approved a Rs. 0.62 per unit reduction in the base tariff following a public hearing, lowering it from Rs. 34 per unit to Rs. 33.38 per unit for FY2026. However, the federal government decided to keep the base tariff unchanged, citing the need to balance consumer relief with the financial sustainability of power distribution companies.
Also Read: Nepra cuts electricity tariff for 2026
Cross-Subsidy Cut and Average Tariff Reduced
As part of broader power sector reforms, the government has significantly reduced cross-subsidy by Rs. 123 billion, bringing it down from Rs. 225 billion to Rs. 102 billion. This step has helped lower the national average electricity tariff from Rs. 53.04 per unit to Rs. 42.27 per unit.
Relief for Agriculture, Commercial and Bulk Consumers
The tariff relief package extends beyond industry. The agricultural sector will benefit from a 16 percent reduction in electricity rates, while commercial consumers will see a 10 percent cut. Electricity tariffs for general services have been reduced by 12 percent, and bulk consumers will receive a 15 percent reduction.
In a major relief move, electricity tariffs in Azad Jammu and Kashmir (AJK) have been slashed by 46 percent, according to official briefings.
Boost for Manufacturing and Exports
Power Division officials stated that the tariff reductions are designed to enhance industrial productivity, boost exports, and attract investment by lowering energy costs. The 26 percent cut in industrial electricity tariffs is expected to provide immediate relief to Pakistan’s manufacturing sector, which has long struggled with high power prices.
Industry representatives have welcomed the decision, noting that reduced electricity costs will improve export competitiveness and support job creation.
Also Read: NEPRA cuts electricity price by 93 paisa per unit for January bills
Power Sector Sustainability and IMF Commitments
Officials emphasized that maintaining the base tariff while offering targeted relief reflects the government’s strategy to stabilize the power sector, address circular debt, and comply with commitments under Pakistan’s IMF programme. The reduction in cross-subsidies also signals a shift toward more cost-reflective electricity pricing.
The new electricity tariff structure will come into effect from the start of fiscal year 2026, delivering immediate relief to industrial, agricultural, commercial and bulk consumers nationwide.
