The government has abandoned its plan to shift electricity tariff rebasing to January 1 each year after the International Monetary Fund (IMF) declined to support the proposal, Business Recorder reported. The decision means the current system of annual rebasing from July 1 will remain in place.
On January 17, 2025, the Economic Coordination Committee (ECC) had approved the Power Division’s proposal to change the rebasing timeline, aiming to ease the financial burden on consumers by implementing tariff hikes during winter months, when electricity consumption and bills are lower.Â
While the Finance Ministry raised no objections, it advised the Power Division to consult development partners, including the IMF, World Bank, and Asian Development Bank (ADB), before seeking final approval.
The Power Division argued that the existing tariff rebasing process—which aligns with the National Electric Power Regulatory Authority (NEPRA) guidelines—results in higher electricity bills during the summer due to increased consumption and concurrent Fuel Charges Adjustments (FCAs). This pattern leads to public dissatisfaction and protests. The division maintained that shifting rebasing to January would help stabilise electricity prices and prevent sharp tariff spikes during peak consumption months.
According to the Power Division’s proposal, NEPRA would have been directed to amend regulatory procedures to facilitate rebasing from January 1. The division also sought authorisation to approach NEPRA to implement the revised policy framework.Â
However, upon engaging with the IMF and other lenders, the plan faced resistance, with development partners advising the government to prioritise ongoing energy sector reforms instead of introducing new initiatives.
Following the IMF’s refusal to endorse the change, the government has shelved the plan, and NEPRA has not received any new guidelines. As a result, the existing rebasing schedule will continue, with annual tariff adjustments taking effect from July 1.
