ISLAMABAD: Pakistan’s power regulator, Nepra, has formally notified K-Electric’s new multi-year tariff for supply, distribution, and transmission until 2030. The notification was issued despite a pending review motion by the federal government, which had objected to the decision.
The new average base tariff has been increased by Rs6.15 per unit — a hike of 18.18% — bringing the rate to Rs39.97 per kilowatt-hour for FY 2023–24. This tariff includes Rs31.96 for power purchase, Rs2.86 for transmission, Rs3.31 for distribution, and Rs2.28 as the supply margin. An adjustment of minus Rs0.44/kWh from the previous year has also been included.
Nepra said it moved ahead with the notification after confirming that there was no legal bar to stop implementation. It used its powers under a 2021 amendment that allows the regulator to directly issue tariff notifications without waiting for federal approval. The decision comes amid pressure from international lenders like the IMF and World Bank to keep tariff decisions free from political interference and to accelerate reforms in the power sector.
Nepra estimated that KE’s total revenue requirement for FY2023–24 is Rs606.9 billion. Out of this, Rs34.7 billion is allocated for supply margin and Rs36.2 billion for recovery losses. However, the regulator warned that KE’s financial situation remains fragile. The company’s bill recovery rate fell to 91.5% this year and is expected to drop to 90.5% next year. This could lead to under-recoveries of around Rs97 billion over two years.
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The government, however, has challenged the tariff approval, alleging that KE received undue financial benefit at the cost of taxpayers and power users nationwide. According to the Power Division, six major interventions in the tariff determination will cost around Rs453 billion over seven years. In addition, higher-than-average fuel costs for KE in FY2024–25 could cause an additional Rs287 billion burden over the same period.
The federal government maintains that all consumers should face a uniform power tariff across the country. To make this possible, it provides subsidies to KE customers. It has also urged Nepra to revise the tariff in a way that ensures fairness, reflects actual costs, and avoids rewarding inefficiencies.
