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Has Rs1.71/unit electricity relief vanished?

Has Rs1.71/unit electricity relief vanished?

It was widely expected that the government would continue the Rs1.71 per unit electricity subsidy component—backed by the IMF staff-level agreement, which explicitly cited plans to fund the relief via additional Petroleum Levy collections. Yet, to the surprise of many, the subsidy appears to have quietly disappeared—if not formally withdrawn, then at least absent from the electricity bills issued for July 2025.
Recall that the only component explicitly extended into FY26 was the Rs182 billion relief—equivalent to Rs1.71 per unit—for all non-lifeline consumers, financed through the enhanced Petroleum Levy. The government, in its communication with the IMF, had committed to maintaining this limited relief until June 30, 2026.
Significant ambiguity now surrounds the fate of this relief and its continuity into FY26. The matter came up during Nepra's recent tariff hearing, but the Ministry of Energy's remarks did little to resolve the uncertainty.
In its response, the Ministry noted that the 'average applicable consumer tariff in July 2025 would be lower by around seven rupees compared to July 2024.' While ostensibly reassuring, the phrasing raises more questions than it answers. No assumptions were disclosed, nor was it clarified whether the comparison referred to gross billing or adjustments embedded within the base tariff trajectory.
With the Rs1.71 per unit subsidy now seemingly off the table, the month-on-month increase in tariffs for non-lifeline protected consumers—who account for the bulk of domestic electricity consumption—exceeds 30 percent. Previously, under the assumption of subsidy continuity, first and second protected slabs were projected to rise by 11 and 9 percent, respectively. They now stand to increase by 35 and 26 percent, respectively. Among non-protected slabs, effective tariffs for the first three categories are slated to rise by 12, 9, and 8 percent month-on-month.
This development implies that effective tariffs in July may be materially higher than assumed—at odds with both prior policy signalling and the inflation projections built on that premise. Whether this reflects a temporary lapse awaiting formal notification, an oversight in tariff design, or a quiet policy reversal is yet to be clarified.
What is clear, however, is that this shift—if sustained—has real implications that one hopes the Pakistan Bureau of Statistics (PBS) appropriately incorporates any change in effective tariffs into its CPI computation, lest the official inflation trajectory miss a key price signal affecting millions.
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