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Nationwide adjustment of fuel charges, as per ECC's approval

Nationwide electricity tariff equilibrium achieved with FCA approval

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Nationwide fuel prices to undergo uniform adjustments, as per ECC's approval
Nationwide fuel prices to undergo uniform adjustments, as per ECC's approval

Nationwide adjustment of fuel charges, as per ECC's approval

The Economic Coordination Committee (ECC) of Pakistan has taken a significant step towards establishing a uniform tariff structure nationwide by approving the Fuel Charges Adjustment (FCA) parity for both K-Electric consumers and state-run power distribution companies (Discos).

The decision aims to eliminate the existing disparity where K-Electric and Discos followed separate FCA regimes, thereby ensuring tariff consistency across the country and safeguarding the financial sustainability of the power sector.

Key details of the FCA parity include:

  • The National Electric Power Regulatory Authority (Nepra) will determine and apply the FCA rates for K-Electric consumers based on those set for Discos, using a tariff rationalisation approach with the same applicable period for both entities.
  • Any difference between the monthly FCA calculated for K-Electric and the notified FCA for Discos will be compensated to K-Electric via subsidies or cross-subsidies, ensuring K-Electric’s financial position is maintained without disrupting tariff uniformity.
  • The uniform FCA application will begin retrospectively from the Discos’ FCA month of June 2025, with the adjusted charges reflected in the August 2025 billing cycle for consumers.
  • The decision aligns with the federal government's policy, as outlined in the National Electricity Policy 2021, emphasizing uniform tariffs across regions for socio-economic objectives and reducing reliance on direct subsidies by streamlining FCA processes.
  • Nepra will preserve regulatory transparency and cost-reflectivity principles by basing FCA calculations on respective fleet cost data and generation mix, even as it applies tariff rationalisation for uniformity.

This policy aims to balance the tariffs for K-Electric consumers with those of other areas in Pakistan, enabling consistent billing practice and financial equilibrium within the power sector while maintaining government oversight via subsidies to manage any FCA gaps.

In addition to the FCA parity, the ECC also approved a relief package of Rs5.8 billion for the affectees of recent monsoon rains, and an allocation of Rs3.5 billion for subsidy for Raast QR Code based person-to-merchant payments. The committee also considered and commended the preparation of the New Energy Vehicle Policy 2025-30 by the Industries & Production Division.

The ECC met with Finance Minister Muhammad Aurangzeb to discuss economic and development matters, and also directed the Ministry of Petroleum to take measures to control losses and ensure operational efficiency in the overall gas sector and supply situation in the country. The committee also instructed the Ministry of Industries & Production to expedite the finalisation and settlement of the arbitration case in court regarding the PNSC ships' arrest in South Africa.

The ECC also approved a TSG of Rs2 billion for the launch of the Prime Minister's Fan Replacement Programme, and a TSG of Rs250 million for the National Security Division, with the remaining amount to be released in a phased manner. The committee also considered a summary submitted by the Ministry of Maritime Affairs regarding the arrest of Pakistan National Shipping Corporation (PNSC) ships in South Africa.

Lastly, the ECC was briefed on a risk coverage scheme for small farmers and underserved areas, expected to add over 750,000 new borrowers to the formal credit system. The ECC directed the Finance Division to reimburse Rs330.526 million to the PNSC through a Technical Supplementary Grant (TSG) as per an earlier ECC decision taken in 2017.

[1] The News International [2] Dawn News [3] Business Recorder [4] ProPakistani [5] The Express Tribune

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