### NEPRA's Tariff Reduction: A Step Towards Economic Relief for Consumers The National Electric Power Regulatory Authority (NEPRA) has announced a significant reduction in the base electricity tariff, cutting it by Rs1.49 per unit for the fiscal year 2025-26. This decision is aimed at providing relief to electricity consumers and businesses across Pakistan, following negotiations with Independent Power Producers (IPPs) that have influenced the pricing structure. The new base tariff is set at Rs34 per unit, down from Rs35.50 per unit in the previous fiscal year, marking a decrease of approximately 4.23% [https://www.nation.com.pk/25-Jun-2025/nepra-cuts-base-power-tariff-by-rs1-50-to-rs34-per-unit-for-fiscal-year-2025-26]. ### Breakdown of NEPRA's Decision and Its Implications 1. **Tariff Reduction Details**: - NEPRA has approved a base tariff reduction of Rs1.50 per unit, resulting in a new average tariff of Rs34 per unit for power distribution companies [https://www.nation.com.pk/25-Jun-2025/nepra-approves-rs1-50-per-unit-cut-in-power-tariff]. - The decision has been forwarded to the federal government for formal notification, pending a final decision on subsidies [https://www.nation.com.pk/25-Jun-2025/nepra-approves-rs1-50-per-unit-cut-in-power-tariff]. 2. **Financial Context**: - The total revenue requirement for ex-Wapda Distribution Companies (DISCOs) for FY 2025-26 is set at Rs3,520 billion, which includes a Power Purchase Price (PPP) of Rs3,066 billion [https://www.nation.com.pk/25-Jun-2025/nepra-cuts-base-power-tariff-by-rs1-50-to-rs34-per-unit-for-fiscal-year-2025-26]. - Capacity charges account for approximately 63% of the total projected PPP, indicating a significant cost structure that influences consumer pricing [https://www.nation.com.pk/25-Jun-2025/nepra-cuts-base-power-tariff-by-rs1-50-to-rs34-per-unit-for-fiscal-year-2025-26]. 3. **Consumer Impact**: - The reduction in tariff is expected to ease the financial burden on consumers, particularly in light of ongoing issues such as load-shedding and rising electricity costs [https://www.geo.tv/latest/610831-nepra-cuts-fy26-base-power-tariff-by-rs149-after-ipp-deal]. - The new tariff will be reflected in consumers' electricity bills starting from June, providing immediate relief [https://www.nation.com.pk/25-Jun-2025/nepra-approves-rs1-50-per-unit-cut-in-power-tariff]. ### Supporting Data and Evidence - **Tariff Changes**: - Previous base tariff: Rs35.50 per unit - New base tariff: Rs34 per unit - Reduction: Rs1.50 per unit (4.23% decrease) [https://www.nation.com.pk/25-Jun-2025/nepra-cuts-base-power-tariff-by-rs1-50-to-rs34-per-unit-for-fiscal-year-2025-26]. - **Revenue Requirements**: - Total revenue requirement for FY 2025-26: Rs3,520 billion - Power Purchase Price: Rs3,066 billion - Capacity charges: Rs6,484/unit/month, accounting for 63% of total costs [https://www.nation.com.pk/25-Jun-2025/nepra-cuts-base-power-tariff-by-rs1-50-to-rs34-per-unit-for-fiscal-year-2025-26]. ### Conclusion: A Positive Shift for Electricity Consumers In summary, NEPRA's decision to cut the base power tariff by Rs1.50 per unit is a significant move towards alleviating the financial strain on consumers in Pakistan. The new tariff structure, set at Rs34 per unit, reflects a strategic response to ongoing economic challenges and aims to stabilize electricity costs amid rising demand and operational pressures. 1. **Key Findings**: - The base tariff reduction is a direct result of negotiations with IPPs and aims to provide immediate relief to consumers. - The financial implications of this decision are substantial, with a total revenue requirement of Rs3,520 billion for the upcoming fiscal year. - Consumers can expect to see the benefits reflected in their electricity bills starting in June, marking a positive shift in the energy pricing landscape [https://www.nation.com.pk/25-Jun-2025/nepra-approves-rs1-50-per-unit-cut-in-power-tariff].