Government announces new electricity tariff from July 1

ISLAMABAD: The Ministry of Energy (Power Division) announced on Thursday that a new electricity tariff will come into effect starting July 1, pending approval following review by the National Electric Power Regulatory Authority (NEPRA).

The aim is to ensure minimal impact on consumers’ monthly bills, with the government earmarking Rs 440 billion in subsidies to mitigate potential increases in electricity costs.

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According to the announcement, the tariff adjustments are designed to limit the increase to less than 2 per cent for approximately 10.68 million low-income consumers, constituting about 58 per cent of the total consumer base.

Higher-income consumers, comprising the remaining 42 per cent, could see an average increase of around 9 per cent.

The statement also noted projections of decreasing electricity tariffs as economic conditions improve, aiming for an average reduction of 3 per cent for all consumers by January 2025 compared to June 2024.

Addressing financial challenges within the power sector, the statement talked about the introduction of fixed charges, which account for 75 per cent of sector costs. The measure is intended to stabilise revenue and improve operational efficiency.

Efforts have also been made to reduce the financial burden on the industrial sector by cutting costs by Rs150 billion, aimed at fostering growth in domestic industry.

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The ministry stated that these measures would ensure the sustainability and affordability of the electricity sector, aligning with broader economic goals.