‘Grid consumption stagnation’

Zafar Yab Khan

Spokesperson for Power Division

This is apropos an analysis titled “Grid consumption stagnation” carried by this newspaper. While generation remains 6 percent below the reference level set for FY 2025, it has nonetheless increased by nearly 1 percent compared to FY 2024. This improvement is particularly evident in the last quarter of FY 2024-25. Industrial consumption has shown a notable rebound, with year-on-year increases of 58.8 percent in April 2025, 47.4 percent in May 2025, and 35 percent in June 2025 compared to the corresponding months in FY 2024.

Contrary to what is mentioned “upward pressure on tariffs this year”, it is pertinent to clarify for FY 2026, the average variable tariff across all categories except for lifeline has been reduced by Rs 1.15/unit. The government is cognizant of the implications of prevailing net metering rates. Amendments aimed at rationalizing these rates are currently under consideration. The levy on captive gas-based generation has been introduced to discourage inefficient captive use and redirect gas toward more efficient RLNG-based power plants. This policy shift is intended to support greater reliance on the national grid, thereby helping to distribute fixed capacity costs more broadly and creating room for reductions in average tariffs over time.

As mentioned in the article regarding the phased withdrawal of price relief measures, it is important to note per unit relief was partially time-bound and partially permanent in nature. The Government has already incorporated the positive outcomes of recent negotiations with power producers and improvements in key economic indicators into the FY 2025–26 consumer-end base tariff, as mentioned above. Rather than a withdrawal, the recent adjustments reflect the standard regulatory process for electricity pricing in Pakistan.