The Power Division has strongly opposed NEPRA’s decision to approve a seven-year Multi-Year Tariff (MYT) for K-Electric. The Ministry warned this move could disrupt the federal government’s subsidy system. It also feared the decision might scare away future investment in the power sector. Federal Power Minister Awais Leghari expressed his concerns in a social media post. He said the move threatens uniform tariff policies and the trust of private investors.
Leghari pointed out delays in revising tariffs for KE’s older power plants. These delays, pending since December 2024, are adding pressure to the power sector. He warned that such regulatory gaps may weaken the entire system. Moreover, they could damage investor confidence, especially in power distribution. The Minister also criticized NEPRA for ignoring long-term risks in KE’s investment planning.
Despite the concerns, NEPRA approved a base tariff of Rs39.97 per unit for KE for FY 2023–24. The new MYT will last until FY 2029–30 and aims to support KE’s Rs400 billion investment plan. NEPRA said the decision would provide clarity for long-term infrastructure projects. KE has claimed its post-privatization work reduced losses and improved services.
NEPRA also reviewed KE’s past and expected recovery ratios, which were around 91–90 percent. Due to this, KE reported losses of Rs40 billion and Rs57 billion for the past two years. NEPRA admitted the company would face more losses without a recovery margin. So, it allowed a gradual increase in the recovery allowance, starting at 93.25 percent.
The final MYT decision now awaits official notification in the government’s gazette. As per NEPRA law, if the government fails to issue this notification within 30 days, NEPRA has the right to do so itself. The tariff issue has once again raised debate over policy stability and investor security in Pakistan’s energy sector.