Pakistan considers electricity tariff hike and gas subsidy reforms

Pakistan is facing potential increases in energy costs as regulators and the federal government consider significant reforms to the electricity and gas sectors.

NEPRA is reviewing a request from the Central Power Purchasing Agency (CPPA) for a Rs2.52 per unit electricity tariff hike. This proposed adjustment for July 2026 is driven by high generation costs, including diesel at up to Rs50 per unit, imported coal at Rs54.47 per unit, and imported LNG at Rs47.37 per unit. If approved, the increase would follow a recent Rs0.75 per unit hike approved for June.

Simultaneously, the federal government is planning to overhaul the gas pricing system by potentially replacing the current slab-based subsidy structure with a more uniform pricing model. Petroleum Minister Ali Pervaiz Malik indicated that the goal is to improve sector performance and reduce financial pressure. To mitigate the impact on low-income households, the government proposes shifting from broad subsidies to targeted social protection programmes.