Wiktor Wise
The price of electricity in Pakistan has been steadily increasing, with the base tariff for domestic consumers hitting PKR 48.84 per unit in July 2024. This price hike, approved by the National Electric Power Regulatory Authority (NEPRA), has led to a growing number of Pakistani households transitioning to solar energy. The cost of electricity in Pakistan is influenced by various factors, including the type of user (residential, commercial, industrial, or agricultural), consumption levels, peak hours, and government subsidies. With rising electricity rates, consumers are encouraged to control their usage, especially during peak hours, to manage their energy costs effectively.
| Characteristics | Values |
|---|---|
| Date | July 2025 |
| Unit price | Varies by province and type of user (residential, commercial, industrial, or agricultural) |
| Factors affecting unit price | Number of units consumed, peak hours, connection type, consumption levels, cost of fuel, government subsidies, transmission and distribution inefficiencies |
| Pricing system | Slab system for residential users, with rates per unit (kWh) increasing as consumption increases |
| Example rates | Up to 50 units: PKR 4-8 per unit; 51-100 units: PKR 12-14 per unit; 101-300 units: PKR 16-18 per unit; Over 300 units: PKR 24-30 per unit |
| Government action | Plans to cut electricity tariff by Rs 10-12 per unit by reviewing taxes and the uniform tariff system |
| Impact of high electricity prices | Increase in adoption of solar energy, with the government recognizing a solar revolution |
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What You'll Learn
Electricity pricing varies by province and type of user
The cost of electricity in Pakistan varies according to several factors, including the province and type of user. Divisional electric supply corporations in Punjab, Sindh, Balochistan, and KPK, for instance, offer electricity at different prices.
The type of user is also a significant factor in determining electricity rates. Residential, commercial, industrial, and agricultural users are charged differently. Residential users are charged based on a slab system, where the rate per unit (kWh) increases as consumption crosses certain thresholds. For instance, up to 50 units, each unit may cost between PKR 4 and 8 with a significant subsidy. As consumption increases, the rates per unit increase, and for over 300 units, the tariff may dramatically increase to PKR 24 to 30 or more per unit.
Commercial users have also experienced a reduction in electricity tariff, with a decrease of 7.61 rupees for commercial use announced in April 2025.
Peak hours, which are periods of high electricity demand and higher prices, also influence the cost of electricity. These hours normally last four hours and are applicable to customers with a 3-phase connection.
The cost of electricity in Pakistan has been rising, leading to a surge in the adoption of solar energy as a more affordable and eco-friendly alternative. The government has acknowledged the high cost of electricity and is working towards reducing electricity prices, including reviewing various taxes included in electricity bills and addressing electricity theft.
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The cost of electricity is rising
The cost of electricity in Pakistan is rising, with a significant surge in recent years. Several factors influence the price of electricity in the country, and these factors have led to an increase in the financial burden on consumers. Firstly, the cost of electricity in Pakistan is determined by the National Electric Power Regulatory Authority (NEPRA), which evaluates and modifies prices regularly. NEPRA's decisions are made under official government oversight, and they set the electricity supply rate and structure for the Government of Pakistan.
The price of electricity varies across different provinces and areas in Pakistan. Divisional electric supply corporations in Punjab, Sindh, Balochistan, and KPK offer electricity at various prices, and the rates are influenced by peak hours, connection type, and consumption levels. The pricing of power units for residential users is based on a slab system, where the amount of power utilized determines the rate per unit (kWh). For example, up to 50 units may be heavily subsidized, with each unit costing between PKR 4 and 8. As consumption increases, the rates per unit also rise, with 51 to 100 units costing PKR 12 to 14 each, and the price continues to increase for higher usage bands, especially during peak hours.
The cost of electricity in Pakistan is also impacted by the cost of fuel, government subsidies, and transmission and distribution inefficiencies. One factor contributing to the rising electricity prices is the uniform tariff system, which has been described as inefficient as it forces one company to bear the burden of another. Additionally, the government has acknowledged the issue of electricity theft in Khyber Pakhtunkhwa, where illegal connections have resulted in substantial losses.
The rising cost of electricity has sparked a solar revolution in Pakistan, with many consumers turning to solar energy to reduce their electricity bills. The country is expected to see an increase in solar capacity under net metering, and the adoption of solar technology is being encouraged by the government through initiatives such as the Benazir Income Support Programme (BISP). While the government is working towards reducing electricity prices and addressing the financial burden on consumers, the continuous increment of electricity unit prices has led to high costs for residents.
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Solar energy is an increasingly popular alternative
The cost of electricity in Pakistan varies according to several factors, including the type of user (residential, commercial, industrial, or agricultural), the amount of electricity consumed each month, and the existence of subsidies. The pricing of power units is based on a slab system for residential users, with rates increasing as consumption moves into higher usage bands, particularly during peak hours.
The boom in solar power adoption has been fuelled by declining solar panel prices, battery prices, and growing consumer independence. China's overproduction of solar panels has lowered costs, making Pakistan the third-largest destination for Chinese exports. The industrial, agricultural, and residential sectors have embraced solar, with imported Chinese modules totalling 13 gigawatts (GW) in the first half of one year and forecasts reaching 22GW by year-end.
The momentum towards solar power also underscores the risks of an unmanaged transition. As more consumers abandon the grid, the decline in demand drives up fixed costs for those who remain connected, straining state finances. This shift towards solarization has largely occurred without active political will, and Pakistan's experience offers critical insights into managing the clean energy transition within complex economic and political landscapes.
To promote the use of solar energy, the Pakistani government has introduced incentives, including net metering and feed-in tariffs, and removed the general sales tax on solar panels. The Sindh Solar Energy Project (SSEP), funded by the World Bank, aims to enhance solar power generation in Sindh Province through utility-scale solar development, distributed solar installations on public buildings, and the deployment of solar home systems in areas with limited grid access.
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The government is trying to reduce electricity prices
The Pakistani government is actively working towards reducing electricity prices for its citizens. The Minister for Power Division has stated that the government is committed to lessening the financial burden of electricity on its consumers and gradually reducing electricity prices. In January 2025, the government announced plans to cut electricity tariffs by Rs 10-12 per unit, providing much-needed relief to consumers who have been facing rising electricity costs.
The government is reviewing various taxes included in electricity bills to achieve these price reductions. The uniform tariff system has been criticised as it forces one company to bear the burden of another, leading to inefficiencies in the sector. The government is also assessing large energy projects to determine if they are in the best interests of consumers. Pakistan has historically procured electricity in a non-competitive manner, which has contributed to the financial burden on consumers.
To address the high cost of electricity, the government is promoting the adoption of solar energy. The country is expected to increase its solar capacity by 10,000 to 12,000 MW under net metering. The Minister for Energy highlighted that 70% of tubewells have been solarised, and the rate of electricity for the industry has been reduced. The government is also tackling electricity theft, which has caused substantial losses, particularly in Khyber Pakhtunkhwa.
The National Electric Power Regulatory Authority (NEPRA) plays a crucial role in evaluating and modifying electricity prices in Pakistan. NEPRA sets the electricity supply rate and structure, ensuring that prices are regularly reviewed and adjusted. The pricing of power units is based on a slab system for residential users, with rates per unit (kWh) varying according to consumption. Pakistan's electricity rates also differ across areas and are influenced by peak hours, connection type, and consumption levels.
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Electricity theft is a problem in some areas
The price of electricity in Pakistan varies according to several factors, such as the type of user (residential, commercial, industrial, or agricultural), the amount of electricity consumed each month, and the existence of subsidies. The pricing of power units for residential users is based on a slab system, with rates per unit (kWh) increasing as consumption moves into higher usage bands. For instance, up to 50 units may be heavily subsidised, with each unit costing between PKR 4 and 8. From 51 to 100 units, the price increases to PKR 12 to 14 per unit, and rates continue to rise with greater consumption. Peak hours, which are periods of higher demand, also affect electricity prices, with rates at their maximum during these times.
Electricity theft, also known as "hooking" or the "kunda system", is a significant problem in Pakistan. It has been identified as a chronic issue throughout the country, with the government facing criticism for its inadequate responses to the problem. In 2013, it was reported that Pakistan had lost Rs90 billion (approximately ₨149.1 billion in 2021) over the last 5 years due to electricity theft and line losses. This issue is particularly prevalent in Karachi, where there are over 4,700 informal settlements, known as Katchi Abadis, whose residents do not have legal access to electricity and rely on illegal connections. These illegal connections overload the K-Electric network and result in financial losses.
The rise in electricity theft has been attributed to various factors, including increasing electricity prices, corruption, per capita income, and the number of consumers. Studies have shown that electricity theft is strongly influenced by the willingness and capacity of households to pay for electricity, with financial constraints playing a significant role. Additionally, electricity theft is facilitated by corruption, including billing irregularities and bribery, as well as the illegal use of electricity.
In recent years, efforts have been made to address electricity theft in Pakistan. In 2014, the President of Pakistan issued an ordinance outlining context-specific punishments for electricity thieves. K-Electric has also introduced new technologies aimed at eliminating the kunda system and electricity theft. However, despite these measures, electricity theft continues to be a challenge, impacting the power sector's development and contributing to electricity shortages and higher prices for paying consumers.
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Frequently asked questions
The price of electricity in Pakistan varies according to several factors, such as the type of user (residential, commercial, industrial, or agricultural), the amount of electricity consumed each month, and the existence of subsidies. The pricing of power units is based on a slab system for residential users, with rates per unit (kWh) increasing as consumption moves through the slabs. For example, up to 50 units may be subsidised, with each unit costing between PKR 4 and 8. From 51 to 100 units, the price may be PKR 12 to 14 per unit.
The cost of fuel, government subsidies, transmission and distribution inefficiencies, and peak hours all impact the price of electricity in Pakistan.
Peak hours are periods of higher demand and higher prices, normally lasting four hours and applying to customers with a 3-phase connection.
In April 2025, the Pakistani government reduced the electricity tariff by 7.41 rupees for domestic use and 7.61 rupees for commercial use. However, as of July 2025, the base tariff for domestic consumers was PKR 48.84 per unit.
