ISLAMABAD: As the National Electric Power Regulatory Authority (Nepra) decided on Tuesday to reduce the national average power tariff by Rs1.14 per unit, the move was criticised by industrialists and businesspersons from Karachi as being `too minuscule`.

The decision to reduce the tariff was taken at a public hearing presided over by Nepra members Maqsood Anwar and Rafique Shaikh.

The government team, led by the Power Division additional secretary, Mehfooz Bhatti, said the regulator had determined national average tariff excluding all taxes, surcharges and duties at Rs34 for FY2025-26, down Rs1.50 per unit from Rs35.50 per unit last year.

After subsidies and cross-subsidies, the government has worked out the tariff to be Rs31.59 per unit, as compared to Rs32.73 per unit last year, a reduction of Re1.14 per unit.

The official said the same rate would apply to K-Electric consumers under the government`s uniform tariff policy.

A formal notification of the new tariffs will be issued within this week. The new rates will take effect from July 1.

Rushed process Karachi-based representatives of the FPCCI, Karachi Chamber of Commerce and Industry, Korangi Association of Trade and Industry and Surjani Town businesses criticised the government and the Nepra for rushing through the approval process and not allowing their requests for time to under-stand and review the government`s petition.

They said the Power Division filed the petition on June 28. It was approved a day later by the federal cabinet and made public on June 30 for a hearing on July 1.

They said the process violated the law that provided at least seven days after the publication of petition to hold a public hearing.

Peak, off-peak billing The industrialists criticised the government for a nominal reduction of Rs1.14 per unit in the tariff after promising `sizeable relief`.

`Even after the reduction of Rs1.14 per unit, the effective tariff would be about Rs5 per unit higher than last year when the industry paid on average Rs30 per unit`, said one ofthe businesspersons.

The government team insisted the effective average tariff during the new fiscal year would be around Rs40.43 against Rs47.89 per unit in FY2025 after taking into account all taxes, surcharges, duties and quarterly adjustments and the removal of PTV fee and electricity duty.

They said the government efforts, coupled with improved exchange rate, helped reduce capacity payments by Rs1.27 per unit on average from 30.88 to Rs29.61 per unit when compared to the outgoing year.

The average transmission and distribution losses of Discos, they claimed, had dropped to 11.03pc from 11.43pc.

Industrial consumers also demanded an end to peak and off-peak rates, enabling the industry to operate round-the-clock instead of shutting down during peak hours due to higher rates.

New tariff The Rs1.15 per unit reduction in tariff would apply to consumers in almost all categories, except lifeline domestic consumers.

There would be no change in electricity rates for first two lifeline slabs of domestic consumers, as they are already over-subsidised.

The per unit rate for lifeline consumers with up to 50 units per month would remain unchanged at Rs3.95, followed by Rs7.74 for those in 50 to 100 unit monthly consumption. They have to maintain their consumption threshold throughout the year.

For all other consumers and categories, the government sought a flat Rs1.15 per unit reduction for FY2025-26.

However, the relief ranges between 3 to 10pc depending on the users` respective rates at present.

The protected consumers in 1 to 100 units would now be charged at Rs10.54 per unit, instead of Rs11.69 at present, showing a reduction of 9.8pc.

The subsequent slab inthe protected category would be charged at Rs13.01 per unit instead of Rs14.16 per unit, down 8pc.

The non-protected consumers in first 100 units would be charged at Rs23.44 per unit instead of Rs23.59 per unit, down by almost 5pc.

The reduction in rates for all other categories including commercial, industrial, agriculture and bulk consumers would vary from three to four percent but nat Rs1.15 per unit. The cheapest rate, in these categories, have been provided to the industry whose average rate would now be Rs33.48 per unit instead of Rs44.32 per unit.

Commercial consumers would be provided electricity at an average Rs45.43 per unit instead of Rs46.58 per unit. The average rate of general services would be Rs43.17 per unit instead of Rs44.32 while tariff for bulk consumers would come down to Rs41.76 per unit from Rs42.92 per unit.

However, agricultural consumers would get an even cheaper rate of Rs30.75 per unit instead of Rs31.90. The average rate would work out to be around Rs31.60 per unit from about Rs32.75 per unit at present.