ISLAMABAD: Pakistani electricity consumers will receive some much-needed relief in their power bills Pakistan’s Power next month as the National Electric Power Regulatory Authority (Nepra) has directed state-owned distribution companies (Discos) and K-Electric to refund Rs1.23 per unit in February 2025 bills.
This refund is based on the Fuel Charges Adjustment (FCA) for December 2024 for Discos and November 2024 for K-Electric, providing significant relief to millions of consumers amid high inflation.
Electricity Tariffs to Decline Further Pakistan’s Power
Power Division and Nepra officials anticipate that electricity rates will continue to decline in the coming months. This trend is driven by lower capacity charges, reduced fuel costs, and a stable Pakistani rupee.
Key highlights of the power tariff reduction:
- For K-Electric consumers, the FCA refund has been set at negative Rs5.0 per unit, amounting to Rs7.21 billion.
- Nepra has withheld Rs5.44 billion for further scrutiny of costs related to part-load operations, startup costs, and degradation curves.
- Additional Rs52 billion may be refunded under the second quarterly adjustment (October-December 2024-25).
Who Will Benefit from the Power Bill Reduction? Pakistan’s Power
The Rs1.23 per unit refund will apply to most consumer categories. However, the following groups will not be eligible:
- Lifeline consumers
- Domestic consumers use up to 300 units per month
- Electric vehicle (EV) charging stations
- Prepaid electricity users
- Agricultural consumers
Domestic consumers with Time-of-Use (ToU) meters will receive a refund, regardless of their consumption levels. If electricity bills are issued before Nepra’s notification, the adjustment will be reflected in the following month’s bills.
Why Are Electricity Costs Going Pakistan’s Power Down?
1. Lower Capacity Charges
Capacity payments to power producers have decreased by Rs50.66 billion, mainly due to:
- Termination of contracts for five thermal power plants
- Suspension of Neelum-Jhelum Hydropower Project
2. Stable Exchange Rate
A relatively stable rupee-dollar exchange rate has also helped control energy costs, reducing financial pressure on power companies and consumers alike.
3. Falling Interest Rates
Lower interest rates have significantly contributed to reducing borrowing costs for the power sector, ultimately benefiting end consumers.
Pakistan’s Power Sector Debt Situation
Despite these positive developments, Pakistan’s circular debt remains a pressing issue. As of June 2024, the total circular debt stood at Rs2.393 trillion, slightly declining to Rs2.384 trillion by December 2024.
What’s Next for Electricity Tariffs in Pakistan?
With a potential Rs52 billion refund under review and fuel costs stabilizing, Nepra is expected to announce further tariff reductions soon. This move will provide significant relief to households and businesses struggling with high energy costs.
Stay tuned for more updates on electricity rates, energy policy, and cost-saving tips to help you manage your power bills effectively.
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