Pakistan electricity crisis and tariff increases

Pakistan is facing a severe electricity crisis characterized by a national power shortfall exceeding 4,000 megawatts. This deficit has led to increased load shedding in both urban and rural areas, with the Lahore Electric Supply Company (LESCO) region experiencing shortages over 1,500MW due to limited gas, diesel, and hydropower availability.

The crisis is exacerbated by high capacity payments, which reached Rs1,565 billion in the last fiscal year. Despite an installed capacity of 45,888 megawatts, low utilization rates—averaging approximately 44 percent—contribute to a high cost structure for consumers.

In response to rising costs, the National Electric Power Regulatory Authority (NEPRA) approved a fuel cost adjustment increasing electricity tariffs by Rs1.11 per unit. This adjustment, based on August 2026 fuel costs, is expected to impose an additional burden of approximately Rs19 billion on consumers. Additionally, NEPRA imposed fines totaling Rs60 million on the Central Power Purchasing Agency (CPPA) and the National Transmission and Despatch Company (NTDC) for inefficiencies and abnormal fuel cost increases.