Nepra Calls Revenue-Based Loadshedding Illegal Amid Debt Warning

Pakistan’s power regulator has publicly declared revenue-based loadshedding illegal, placing the government’s energy management policy under renewed scrutiny as households and businesses continue to face electricity cuts in high-loss areas across the country.

The issue surfaced during a public hearing of the National Electric Power Regulatory Authority, where officials discussed a minor fuel cost adjustment of 27 paisa per unit. The hearing quickly shifted toward the wider and more controversial question of whether consumers can legally be denied electricity because recovery rates are poor in their localities.

According to the Power Division’s position presented at the hearing, the practice is still being used in different parts of the country, including areas served by K-Electric. Officials argued that discontinuing revenue-based outages could add more than Rs400 billion to the power sector’s circular debt, which has already climbed sharply in recent months.

Nepra member Amina Ahmed made clear during the proceedings that revenue-based loadshedding has no legal cover. However, the Power Division maintained that the practice would continue for now because the government considers it necessary to prevent further financial pressure on the electricity supply chain.

The disagreement has exposed a deeper policy clash between legal compliance and financial management. Regulators are expected to protect consumer rights and enforce electricity rules, while the federal government is trying to manage a sector burdened by unpaid bills, theft, weak recoveries and rising generation costs.

The circular debt figure cited during the hearing has added urgency to the debate. Officials said the debt had reached nearly Rs1.798 trillion by March 31, rising from around Rs1.161 trillion at the beginning of the fiscal year, a trend that shows how quickly liabilities can accumulate when payments across the power chain slow down.

The hearing also touched on fuel supply and tariff pressures. Officials indicated that gas availability for the power sector had improved and that another LNG cargo was expected to add further supply soon. The government is also reviewing whether the petroleum levy on furnace oil can be removed to soften the impact of higher electricity costs, though such a move would require clearance from the International Monetary Fund.

For ordinary Pakistanis, the dispute has immediate consequences. Revenue-based outages often affect entire neighbourhoods, meaning regular bill-paying consumers can suffer power cuts because of broader losses in their area. Traders, students, small manufacturers and households are among those most exposed when outages become unpredictable.

The next phase will depend on how the federal government reconciles Nepra’s legal position with its own financial concerns. Unless a workable recovery model is introduced, the controversy over revenue-based loadshedding is likely to remain a flashpoint in Pakistan’s already fragile power sector.