ISLAMABAD: The consumers of Pakistan would notice a rise in the electricity tariff by Rs1.74 per unit in June 2026 after a public hearing conducted by NEPRA after assessing the application submitted by the CPPA, who was requesting additional recovery of fuel cost. The CPPA had applied to recover Rs1.73 per unit for June from the consumers as a result of the shortage created in the month of April. The shortage had occurred due to the interruption of LNG supply due to US-Iran war and the effect on the ships sailing through the Persian Gulf.
This last amount comes after adding the amount of Rs1.73 per unit FCA claim along with the expiration of the minor negative fuel adjustment. The aggregate amount being claimed from the electricity consumers exceeds Rs16 billion.
The LNG Supply Chain Disrupted
The CEO of the CPPA, Rehan Akhtar, clarified how events unfolded in the case at the hearing. According to him, the reference price of fuel for April was fixed at Rs8.25 per unit, a price that was determined beforehand on the basis of the expected price and supply of fuel. However, the actual price worked out to be Rs9.975 per unit. The price difference of Rs1.725 per unit is almost totally due to the disruption of the LNG supply chain because of the war between US and Iran.
There were also other technical considerations that increased costs. Transmission of cheaper electricity produced in Sind power stations to upcountry centers of load had its problems, making the production of local cheaper electricity the only option.
“What happens near the Strait of Hormuz does not stay near the Strait of Hormuz. It shows up in electricity bills in Lahore, Karachi, and Peshawar within two billing cycles.”
Expensive workaround, albeit subsidized
In order to mitigate the adverse effects of high LNG prices on electricity tariffs, special arrangements were made regarding the import of emergency LNG and a price reduction was provided. The emergency Liquefied Natural Gas (LNG) would cost consumers Rs2,000 per unit against the current market rate of Rs3,500 per unit. As a consequence of this, the electricity prices for each unit in Pakistan in June 2026 could be limited to Rs1.73 per unit.
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Demand is already decreasing except in industry
The electricity price increase in Pakistan in June 2026 takes place when there has been a fall in electricity demand for nearly all user segments. Overall electricity demand was down 8.5 percent in April 2026 from April 2025. Households managed a decrease of 15 percent whereas the commercial sector witnessed a decline of 9.5 percent, and the services sector a decline of 7.2 percent. The agricultural and bulk consumers’ demand has fallen by 53 and 13 per cent respectively.
The exception is the industrial sector, where consumption increased by 13.5 percent due to gas disconnection resulting in captive power generation moving to the grid and due to the incentives package encouraging more industrial consumption. Industrial consumers belonging to Karachi, on the other hand, complained about the incentives package at the Nepra hearing stating that the package had benefitted only certain consumers because of a “faulty design.”
| Factor | Impact on FCA |
|---|---|
| US-Iran war — LNG supply disruption | Primary driver of Rs1.725 gap |
| Transmission constraints (Sindh to upcountry) | Secondary cost pressure |
| K-2 nuclear plant forced outages | Reduced cheap baseload availability |
| K-2 past claims (Rs3.4bn) | Added to overall FCA |
| Govt LNG pricing cap (Rs2,000 vs Rs3,500) | Contained the increase |
| Load management, reduced furnace oil use | Partially offset cost rise |
| Expiry of prior negative FCA | Added Rs0.01 to net figure |
Warning issued by Nepra to K-Electric
Besides the hearing regarding the increase in electricity bills for June 2026 held in Pakistan, there was another equally important point in it for the people of Karachi. The Nepra requested from K-Electric a detailed report regarding “excessive power cuts” due to extremely hot summer weather in the city
K-Electric response
K-Electric’s management, attending the hearing online, committed to submitting a detailed report urgently but did not immediately respond to the specific allegations. A post-hearing statement from a KE spokesperson said the company’s loadshedding practices align with the National Electricity Policy 2021, and attributed localised faults to development work by civic authorities in the city.
There was also an increase in the number of complaints coming from regions with both heavy losses and light losses; this shows that the problem is not merely an issue related to the infrastructure quality of poor regions. Worse still, the problem of power shortage due to technical reasons did not appear in the record books for load management, as reported by Nepra.
It is important to consider how difficult a message the electricity price increase in the bills of June 2026 was for the citizens to take especially for those residing in Karachi, whose summertime temperature averages above 40 degrees Celsius and cannot afford to live without electricity. The current review by the regulatory body of the shedding activities of K-Electric further complicates the situation.
The Broader Signal
Pakistan’s energy sector has struggled for years with structural issues including circular debt, generation imbalance, transmission problems, and poor tariffs. The higher electricity prices faced by Pakistani consumers in June 2026 are, in a way, merely an extension of all these issues. However, they now come with an additional factor – that of the transfer of geopolitical risks from the Persian Gulf directly to their electricity bills. So long as Pakistan remains dependent on the import of LNG for electricity generation, events taking place around Iran would keep landing on Pakistani billboards shortly afterwards.
