Govt says tariff hike of up to Rs6 per unit averted

ISLAMABAD: The federal government said on Monday that electricity consumers had been protected from a projected increase of up to Rs6 per unit in June 2026 bills after steps were taken to secure liquefied natural gas supplies and manage generation costs.

In a statement, the Power Division said the expected increase linked to higher fuel prices and a shortage of LNG for power generation had been contained, and consumers could instead see a small relief of up to 20 paisa per unit in June bills. The government said Pakistan arranged LNG cargoes from the spot market and also benefited from the resumption of contract-based LNG shipments from Qatar.

The division said the measures were taken despite what it described as an acute shortage of re-gasified LNG caused by the regional conflict involving the US and Iran, a sharp rise in international fuel prices and the need to generate electricity through more expensive fuel oil.

The Power Division said the government’s policy continuity and mitigation measures would prevent any upward revision in June electricity bills. The projected relief would come after offsetting the impact of monthly fuel price adjustments against a reduction already approved under the quarterly tariff adjustment mechanism.

Attributing the outcome to official intervention, the division said: "Owing to timely state interventions, astute policy decisions and moderate load management, the federal government has shielded electricity consumers from a projected tariff hike of Rs5-6 per unit for the billing month of June 2026."

Fuel prices and generation mix

The statement said RLNG remains central to Pakistan’s power generation system. The reference tariff had been calculated on the basis of Brent crude at $70 per barrel, but the benchmark climbed to $120 per barrel in April 2026.

According to the Power Division, such an increase would ordinarily have led to a fuel price adjustment of Rs5-6 per unit. However, the government managed the situation through additional domestic gas allocations, greater use of furnace oil and imported coal-fired plants, and balanced load management.

The division said these steps kept the actual fuel adjustment for April 2026 at Rs1.73 per unit. When the base tariff had originally been determined by the National Electric Power Regulatory Authority, the federal government later notified it after incorporating subsidies. Those estimates, it said, were based on projected fuel costs, exchange rates, demand trends and the expected generation mix.

The statement added that the regional conflict changed those assumptions by pushing up global fuel prices, disrupting supply chains and altering the national generation pattern.

Quarterly adjustment and consumer impact

The Power Division said administrative oversight and structural policy measures, including lower transmission and distribution losses and other sector reforms, had contributed to a reduction in tariffs under the quarterly adjustment for the first quarter of the current year.

A cut of Rs1.93 per unit had been approved for the next three months under the quarterly tariff adjustment, creating a collective cushion of Rs65 billion. At the same time, the monthly fuel adjustment for April 2026, initially estimated at Rs5-6 per unit, was limited to Rs1.73 per unit.

According to the division, the negative quarterly adjustment and the positive monthly fuel adjustment would largely cancel each other out, leaving room for relief of up to 20 paisa per unit. The per-unit tariff for June 2026 would therefore remain unchanged compared with the January-May 2026 baseline.

The statement said the government had thereby prevented an additional burden of about Rs38 billion from being passed on to consumers for April alone. During January-March 2026, a negative impact of Rs65 billion was recorded under the quarterly adjustment mechanism, while a positive impact of Rs19 billion was registered under the April fuel adjustment, resulting in a net negative variance of Rs46 billion against the projected base tariff.

The Power Division said the quarterly reduction was mainly driven by higher national electricity demand, improved line loss control, price stabilisation and stronger consumption under incremental tariff packages.