The National Electric Power Regulatory Authority (NEPRA) has declared revenue-based loadshedding illegal, escalating an ongoing conflict with the Power Division over electricity distribution practices in Pakistan.

Despite the regulatory ruling, the Power Division has refused to discontinue the practice, arguing that it remains necessary to control financial losses and manage rising circular debt in the power sector.

Officials confirmed during a public hearing on fuel cost adjustments that distribution companies are still carrying out revenue-based loadshedding in high-loss areas to reduce financial strain.

Authorities warned that immediately ending the practice could increase circular debt by more than Rs400 billion, pushing total liabilities to around Rs1.8 trillion.

Regulatory vs operational conflict

NEPRA member Amina Ahmed reiterated that revenue-based loadshedding violates existing regulatory rules. However, Power Division officials maintained that operational realities and financial constraints leave little alternative.

The disagreement highlights a growing governance gap between regulatory compliance and sector financing challenges.

Energy supply situation

Officials also provided updates on supply conditions, stating that:

• Gas supply to the power sector has increased from 80 to 140 MMCFD
• An additional LNG shipment is expected to raise supply to 250 MMCFD
• There is currently no electricity shortage in Karachi, though load management continues in high-loss areas

Policy considerations underway

The government is also reviewing measures to ease electricity prices, including a possible removal of the petroleum levy on furnace oil, subject to approval from the International Monetary Fund (International Monetary Fund).

Officials further indicated plans to expand the “protected consumer” category through improved targeting mechanisms.

The situation underscores persistent structural challenges in Pakistan’s energy sector, where regulatory directives, financial constraints, and operational decisions continue to clash as authorities attempt to stabilize the power system.