Federal Government Considers Relief for Low-Income Electricity Consumers in Pakistan

Major Tariff Structure Reforms on the Table

The federal government of Pakistan is reportedly contemplating significant changes to the electricity tariff structure, a move that could provide substantial relief to millions of low-income households. According to insider sources, the government has realized that the current billing system unfairly penalizes consumers who slightly exceed the 200-unit monthly usage threshold, pushing them into a much more expensive ‘non-protected’ category for an extended period.

Current Slab System: A Burden for Vulnerable Households

Under the existing tariff system, any electricity consumer who uses even one unit above the 200-unit monthly mark is automatically classified as non-protected. This classification results in those consumers paying a considerably higher rate for the next six months, even if their subsequent usage drops below 200 units. Reports indicate that a consumer using just 201 units can end up paying up to Rs. 5,000 extra over six months, a cost burden that disproportionately impacts low-income families.

Federal Cabinet Raises Concerns

This pressing issue was strongly highlighted in a recent federal cabinet meeting, where several ministers argued that the policy is excessively harsh and unjust for the majority of Pakistan’s vulnerable citizens. As cabinet members pointed out, “A person using 201 units pays almost Rs. 5,000 extra over six months, that’s harsh, especially for low-income users.” This collective concern prompted calls for an immediate review of the tariff structure.

Prime Minister’s Response and Committee Formation

Recognizing the gravity of the situation, Prime Minister Shehbaz Sharif has reportedly shown a willingness to address these concerns. Sources suggest that the Prime Minister is considering the formation of a high-level committee tasked with reviewing the current electricity tariff policy. The proposed committee’s mandate will be to study the impact of the existing slab system in detail and to present actionable recommendations to the federal cabinet for consideration.

Revised Slab Proposal: Relief for ‘Just Over’ Consumers

Among the key options being discussed is a revision of the ‘non-protected’ status. The government is considering increasing the threshold so that only those consuming 301 units or more per month would fall under the non-protected category. If implemented, this change would provide immediate financial relief to thousands of households who barely cross the 200-unit limit and are otherwise subjected to higher rates for six months.

Another alternative under study is to ensure the non-protected rate applies only for the month in which the consumer exceeds the limit, rather than locking them into the higher tariff for half a year. Such a shift would align the billing process more closely with actual monthly consumption, thereby making it fairer for those whose usage occasionally fluctuates.

Background: Policy Origins and Public Backlash

The controversial 201-unit slab was originally introduced by NEPRA (National Electric Power Regulatory Authority) and the Ministry of Power with the intention of segmenting consumers for targeted subsidy withdrawal. However, mounting public backlash and media scrutiny have accelerated calls for a policy review. Consumer rights groups and ordinary citizens alike have voiced frustration over what they see as an arbitrary and punitive billing practice.

Quarterly Adjustments and Anticipated Price Reductions

In parallel with these potential reforms, Pakistani electricity consumers are also expected to benefit from reductions in power tariffs due to scheduled quarterly and fuel price adjustments. Power distribution companies have already submitted a request to NEPRA for a fourth quarterly adjustment, with a hearing held on August 4, 2025.

The anticipated change is a negative tariff adjustment of Rs1.89 per unit, stemming from an amended agreement with power generation companies. For consumers, this could mean an additional reduction of Rs0.34 per unit in their August electricity bills, as part of the quarterly adjustment mechanism.