The National Electric Power Regulatory Authority (NEPRA) has announced an 18-paisa per unit reduction in electricity tariffs for K-Electric consumers.

The tariff decrease has been announced as part of the monthly fuel cost adjustment (FCA) for September. A notification regarding the adjustment has been issued.

According to NEPRA, this reduction will reflect in consumers' December bills. However, the adjustment will not apply to lifeline consumers, electric vehicle charging stations, or households consuming up to 300 units per month.

The FCA mechanism allows utilities to adjust tariffs based on changes in fuel costs, with increases or reductions passed on to consumers accordingly.

Meanwhile, K-Electric has proposed a significant increase in its multi-year tariff from Rs3 to Rs6 per unit. If approved, the average electricity price for K-Electric consumers will rise to Rs47 per unit.

The National Electric Power Regulatory Authority (NEPRA) is expected to hold a public hearing on the matter this week. Following the hearing, a notification will be issued to finalize the proposed tariff adjustment.

Sources reveal that K-Electric's Saudi shareholder raised the tariff issue at the highest level, briefing the Special Investment Facilitation Council (SIFC) and the prime minister on the matter. Federal Finance Minister Muhammad Aurangzeb has also been informed about the tariff revision proposal.

The proposed multi-year tariff is likely to attract investment in K-Electric by foreign companies. The adjustment may widen the tariff gap between K-Electric and other distribution companies (DISCOs) by up to Rs12 per unit. Additionally, the government subsidy to cover the tariff difference for K-Electric consumers is expected to rise, putting further pressure on public funds.