Government says timely interventions avoided major electricity price hike amid Iran-US conflict
Power Division said on Monday that electricity consumers in Pakistan would receive tariff relief for June 2026 despite mounting energy sector pressures caused by the Iran-US conflict and soaring global fuel prices.
In a statement, the Power Division said government interventions and policy measures helped prevent a projected increase of Rs5 to Rs6 per unit in electricity tariffs for June billing.
Fuel crisis and RLNG shortages
Officials said Pakistan faced an acute shortage of Re-gasified Liquefied Natural Gas (RLNG) due to regional tensions linked to the Iran-US conflict, while international fuel prices surged sharply.
The statement noted that Brent crude prices climbed to around $120 per barrel in April 2026, significantly higher than the $70 benchmark used for tariff calculations.
Authorities also had to rely on more expensive fuel oil and imported coal-based generation due to supply disruptions affecting RLNG availability.
Government limits tariff impact
Despite these pressures, the government said the actual Monthly Fuel Price Adjustment (FPA) for April 2026 was contained at Rs1.73 per unit, far below initial estimates of Rs5–Rs6 per unit.
At the same time, the National Electric Power Regulatory Authority approved a negative Quarterly Tariff Adjustment (QTA) of Rs1.93 per unit for three months, creating consumer relief worth approximately Rs65 billion.
Officials said the negative quarterly adjustment effectively offset the positive fuel adjustment, resulting in projected relief of up to 20 paisas per unit for consumers.
As a result, June 2026 electricity tariffs are expected to remain broadly unchanged compared with the January–May 2026 period.
Sector reforms and demand growth support relief
The Power Division attributed the relief to lower transmission and distribution losses, improved administrative oversight and structural reforms in the power sector.
Officials added that rising electricity demand, better line-loss management and tariff stabilization measures also contributed to reducing the overall financial burden on consumers.
The government estimated that its intervention prevented an additional Rs38 billion burden from being passed on to consumers for April alone.
Energy sector under regional pressure
The statement said the regional conflict had disrupted supply chains and altered Pakistan’s power generation mix, forcing authorities to adopt emergency fuel management measures.
The government responded by allocating additional domestic gas supplies, optimizing furnace oil and coal-based generation and implementing balanced load management to stabilize the grid.
Officials said the measures demonstrated that the country’s tariff framework remained resilient despite severe global and regional shocks.