The Power Division of Pakistan has recently issued a notification introducing fixed monthly charges on domestic electricity consumers across various consumption slabs.
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This move aims to recover approximately Rs 101 billion annually while addressing structural issues in the power sector, such as high fixed costs and declining grid demand due to rising solar adoption.
The charges vary by usage levels and consumer categories, with lifeline users (permanently below 100 units) remaining exempt.
This adjustment follows approvals and is linked to efforts to reduce cross-subsidies, particularly benefiting industrial users through lower variable tariffs.
Slab-Wise Fixed Charges Introduced
The new fixed charges are consumption-based and apply to most domestic users except true lifeline consumers.
For lower-usage protected consumers (up to 100 units), a Rs 200 fixed charge now applies to around 9.9 million users previously exempt or lightly burdened.
Over 6.1 million protected consumers in the up-to-200-unit category will pay Rs 300 monthly.
Non-protected users face charges starting from Rs 275 per kW for those occasionally exceeding low thresholds.
Higher slabs see progressive increases: Rs 300 for the 200-unit slab (affecting about 2.24 million), Rs 350 for 201–300 units (2.9 million consumers), Rs 400 for 301–400 units (around 1 million), Rs 500 for 401–500 units (about 400,000), and up to Rs 675 per kW for those exceeding 500 units.
For Time-of-Use (ToU) and higher-consumption users, some offset comes via reduced variable charges.
Broader Implications and Rationale
The policy seeks equitable recovery of fixed costs like capacity payments and transmission, which were previously mismatched with mostly volumetric tariffs (over 93% recovery per unit).
It reduces cross-subsidy burdens on industries by about Rs 4.04 per kWh through their tariff cuts.
Critics argue it shifts financial relief for industries onto households, potentially straining low-income users amid inflation.
The government views it as essential for grid sustainability and long-term financial health, aligning with the National Electricity Plan’s goal of fixed charges covering at least 20% of costs.