KARACHI: Pakistan’s National Electric Power Regulatory Authority (NEPRA) has slashed the power tariff by Rs1.14 per unit as a fuel price adjustment measure, state-run media reported on Saturday, with the move likely to further ease inflation in the country. 

The decision is expected to provide relief to businesses and citizens, who have suffered from steep and sudden increases in electricity tariffs following energy sector reforms suggested by the International Monetary Fund (IMF).

According to the Pakistan Bureau of Statistics, electricity charges had increased by 58.8% until May this year.

“According to a statement issued by the Power Division, NEPRA has once again reduced electricity prices by Rs1.14 per unit on account of fuel adjustment,” state broadcaster Radio Pakistan said. 

“The price reduction will be applied to the bills of December.”

The state media said electricity prices would continue to decrease because of the government’s prudent measures.

Meanwhile, Energy Minister Awais Ahmed Khan Leghari said in a statement the government was determined to make electricity more affordable for the people.

Pakistan produces expensive electricity due to a combination of factors including high reliance on imported fossil fuels, inefficient energy mix, substantial transmission and distribution losses and chronic issues like circular debt and regulatory inefficiencies. 

The outdated infrastructure and inadequate power plants further exacerbate costs, while underutilization of domestic resources such as hydropower and coal add to the problem.

Additionally, fluctuations in foreign exchange rates and complex tariff structures contribute to higher electricity prices. High power cost is one of the key factors that lead to spiraling inflation in the country.