The National Electric Power Regulatory Authority (Nepra) held a public hearing to review Pakistan’s electricity pricing and power purchase price (PPP) projections for the upcoming fiscal year 2025-26. The hearing, which was centered around a petition filed by the Central Power Purchasing Agency-Guarantee (CPPA-G), revealed key insights into the financial outlook of the country’s power sector, according to a news report.Â
One of the main concerns raised during the session was the growing dissatisfaction within the industrial sector over inconsistent power supply, which has led many industries to consider returning to captive power plants (CPPs), despite their higher operational costs. Industries have voiced concerns over the reliability of the grid, which continues to disrupt operations.
During the hearing, CPPA-G presented several scenarios for the projected PPP, ranging from Rs24.75 to Rs26.33 per unit. However, some industry stakeholders criticized the projections, arguing that they did not accurately account for expected declines in hydropower generation and the potential impact of the exchange rate on future electricity pricing. In particular, there were concerns that the assumed exchange rate of Rs290 per US dollar would exert additional upward pressure on electricity prices.
Despite these concerns, the hearing also revealed that the PPP could decrease by as much as 78 paisa to Rs2.25 per unit, which would result in significant savings for consumers, ranging from Rs140 billion to Rs400 billion in the next fiscal year. The average purchase price is expected to be lower than the current year’s average of Rs27 per unit.
Officials also discussed the possibility of a Rs2-per-unit reduction in tariffs, with electricity demand expected to increase by 2.8% to 5%. The energy ministry noted that demand for electricity had recently risen, particularly following a reduction in electricity tariffs, and further growth was anticipated with GDP expansion.
Nepra also questioned the Ministry of Energy’s optimistic projections for electricity demand, considering the downward trends observed in recent years. However, ministry officials explained that demand was expected to rise based on projected GDP growth, as seen in the 28% increase in demand in April, largely driven by industries reconnecting to the grid.
On the fuel front, the Ministry of Energy provided estimates for fuel prices in the upcoming year. Gas for electricity generation is expected to cost Rs1,050 per mmBtu, while coal prices will vary depending on the type, with Thar coal projected at $20 per ton for the first quarter, and imported coal prices fluctuating between $35 to $100 per ton.
Despite the potential for slight tariff reductions, industry representatives emphasized the need for greater consistency and reliability in power supply. As the discussions around the PPP and tariff adjustments continue, industries remain wary of the growing reliance on price adjustments rather than improving grid stability.
