By SKM
December09, 2025
ISLAMABAD — In a landmark decision set to energize Pakistan’s economy, the federal government has secured approval from the National Electric Power Regulatory Authority (NEPRA) for a major reduction in electricity tariffs on incremental consumption for industries and agriculture. Officials are calling it a game-changing initiative aimed at stimulating production, increasing exports, and creating employment while providing indirect relief to consumers across the country.
Under the new framework, NEPRA has endorsed a rate of Rs 22.98 per unit for incremental electricity consumption, down sharply from the previous rates of Rs 34 per unit for industries and Rs 38 per unit for agriculture. The move is expected to reduce production costs, stabilize supply chains, and ease inflationary pressures that ultimately affect household expenses.
To illustrate, a farmer who previously consumed 100 units and now uses an additional 100 units will see an average reduction of Rs 7 per unit, while an industrial consumer adding 1,000 units will enjoy an average saving of Rs 5 per unit. These savings are anticipated to enable industries to operate at higher capacity and farmers to manage irrigation more efficiently, supporting price stability in essential goods for consumers.
Immediate Relief with a Three-Year Horizon
The Power Division has welcomed NEPRA’s approval and begun the process of issuing the official notification, after which the package will come into effect immediately. The tariff cut will apply to both ToU and non-ToU consumers across all DISCOs and K-Electric, covering peak and off-peak hours. Incremental consumption will be measured against the reference period of December 2023 to November 2024, ensuring relief is only for usage above last year’s levels.
The package is structured for three years, automatically expiring at the end of its term, allowing businesses and farmers to plan long-term expansion with confidence.
Built-in Safeguards and Financial Discipline
To maintain fiscal balance, the scheme is subsidy-neutral. Positive Fuel Cost Adjustments (FCAs) will apply on incremental units, while QTAs, DSS charges, and negative FCAs will not. The framework also includes:
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Automatic review if incremental consumption exceeds 25% above baseline.
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Semi-annual assessments to ensure cost-revenue alignment.
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Immediate termination if upward tariff adjustments are required in two consecutive reviews.
Any unforeseen loss, though unlikely, will be borne only by consumers availing the package.
Boosting Investment and Diversification
Energy Minister Awais Leghari emphasized that the scheme would strengthen Pakistan’s economic backbone, ensuring domestic and commercial consumers are shielded from additional burden. The incentive also extends to greenfield industries, data centers, and crypto-mining operations, signaling the government’s intent to promote technology-driven growth and attract diversified investments.
Officials believe the combination of lower energy costs and policy certainty will spur industrial and agricultural productivity, create employment opportunities, and ultimately revive economic growth.
Economic analysts note that reducing the cost of incremental electricity could have a multiplier effect across the economy: containing prices of essential goods, improving export competitiveness, and stabilizing markets. The government frames the initiative as a step toward reviving growth while delivering meaningful relief to citizens. Ends
