Karachi bearing brunt as ministry looks to block FCA relief yet again
The hearing, which was originally deferred at the behest of the Power Division, covered the legal aspect of the Ministry of Energy's (MoE) request to defer the decision on KE's April FCA in light of their pending submission to the Cabinet – requesting application of uniform FCA across the country.
The Power Division sought another deferral – submitted on June 27, 2025 – which NEPRA declined and decided to hear KE's case in the public forum.
The MoE highlighted that based on its submission to the Cabinet on approving application of uniform FCA across the country, NEPRA should withhold and defer the decision until the Cabinet's decision.
They argued that the discrepancy between KE's relief of PKR 4.69 to consumers conflicts with the XWDISCO of PKR 0.93 and would strain the federal budget. Their argument claimed that just as the Quarterly Tariff Adjustment (QTA) is applied uniformly across Pakistan, the FCA should follow the same principle.
NEPRA's said the legal stance highlighted that the FCA mechanism is clearly defined in the law, and any unwarranted delays would not be legally sustainable. Moreover, retrospective applications of FCA would be legally indefensible and would likely face legal challenges.
NEPRA also highlighted that the MoE's inability to raise this issue earlier or explicitly ask for a stay order in their review of the recently approved Multi-Year Tariff for KE, has put them in a difficult position to justify any delayed decision.
Karachi's industrialists echoed this concern, urging NEPRA to remain independent and resist any pressure from the Ministry. They pointed out that the Ministry never objected when Karachi used to pay for positive FCAs in the past, which increased the applicable electricity price while customers of DISCOs enjoyed relief through negative FCAs.
Citing a decision from IMF's May 2025 brief, Rehan Javed – a prominent industrialist – shared that IMF instructions specifically required Pakistan to implement timely adjustments in the power sector to manage the country's circular debt. Delays in FCA decisions, whether positive or negative would risk undermining this objective.
Echoing similar sentiments, Tanveer Barry, Karachi Chamber of Commerce representative, and Arif Bilvani, prominent industrialist, highlighted what they termed the continued economic discrimination against Karachi. They questioned why Karachi consumers are forced to pay the Power Holding Limited (PHL) surcharge of Rs3.23 per unit of electricity despite contributing nothing to the circular debt for the next six years.
They argued that Karachi consumers should now fully benefit from the negative FCA instead of being selectively targeted. They also raised concerns about the government's selective application of the 'Apna Meter, Apni Reading' program, which has not been extended to Karachi.
Concluding the session, Amina Ahmed, Member (Law), summarizing the frustration of many, questioned why the Ministry's sudden urgency should override a process that has been place for nearly two years – in reference to KE's reference fuel cost of PKR 15.99.
'Its like the ministry has woken from its slumber,' she remarked.
She also mentioned the absence of clear FCA guidelines – similar to QTA guidelines - and asked if it is imprudent to put Karachi's consumers on hold on the basis of an already delayed Cabinet approval – which may or may not implement a uniform FCA regime.
Speaking during the hearing, Moonis Alvi, CEO KE, shared that they trust NEPRA's process in upholding fairness in whatever decision they may pass and that KE will abide by the decision notified as per the Authority.
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