Big Relief for Electricity Consumers

Published On: January 22, 2026

In a major relief move for electricity consumers, the Power Division has announced a massive reduction of Rs 123 billion in cross subsidy since the current government assumed office, significantly easing the burden on consumers and industries.

According to the Power Division, the total cross subsidy has been reduced from Rs 225 billion to Rs 102 billion, while the per-unit subsidy burden has dropped from Rs 8.9 to Rs 4.02 per unit. As a result, electricity tariffs across various sectors have seen noticeable reductions.

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Big Relief for Electricity Consumers

Industrial electricity rates have declined from Rs 62.99 per unit (including taxes) to Rs 46.31 per unit, providing substantial relief to the manufacturing sector. Similarly, the average electricity price per unit has been reduced from Rs 53.04 to Rs 42.27, marking a significant decrease.

Officials said the reduction became possible due to the shutdown of inefficient power plants and successful renegotiations with Independent Power Producers (IPPs). These reforms have helped lower overall power generation costs and improve efficiency in the energy sector.

To further encourage electricity consumption and industrial activity, the government has also introduced a three-year package offering electricity at Rs 22.98 per unit for additional power usage.

The Power Division stated that work has already begun on a comprehensive plan to eliminate circular debt, which could provide additional relief of Rs 3.23 per unit to consumers once implemented.

However, the division noted that the number of protected consumers has doubled to 22 million, largely due to the rise in off-grid solar users. This increase has added pressure on the power sector, while commercial and bulk supply consumers continue to bear a higher cross subsidy burden than industries.

The Power Division emphasized that electricity tariffs reflect the government’s broader social and economic policies. Authorities are exploring multiple options to further reduce cross subsidies, including subsidy reforms and debt refinancing, to ensure long-term sustainability of the power sector.