ISLAMABAD: K-Electric has renewed its efforts to secure the support of Minister for Power, Sardar Awais Ahmad Khan Leghari for an upward revision of its tariff after the National Appellate Tribunal rejected its appeal against the revised Multi-Year Tariff (MYT), a dispute that is now before the Sindh High Court (SHC), well-informed sources told Business Recorder.
In this regard, KE Chief Executive Officer Syed Muhammad Taha held a meeting with the Power Minister a couple of days ago, during which he shared the company’s current financial position and sought the government’s support for what the utility describes as a win-win resolution of its MYT for FY2024-30, the sources added.
According to sources, Taha proposed the constitution of a working group to deliberate on key considerations and develop a fair and sustainable resolution of the company’s tariff dispute.
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The KE chief executive argued that such a resolution should support the Power Division’s objectives of improving efficiency across the power sector while ensuring the financial sustainability of the utility and its ability to continue providing services to consumers effectively.
The renewed engagement comes against the backdrop of a major regulatory dispute following the downward revision of KE’s tariff by National Electric Power Regulatory Authority (NEPRA) on a motion filed by the Federal Government through the Power Division.
NEPRA reduced KE’s MYT by Rs7.60 per unit, or approximately 19 percent, from Rs39.97 per unit to Rs32.37 per unit. The decision, issued in October 2025, significantly altered the tariff framework under which the company had expected to operate during the control period.
The Power Division had argued that the original tariff determination could have provided KE with an undue financial benefit of nearly Rs750 billion over the seven-year control period, at the expense of the national exchequer, electricity consumers across the country and taxpayers.
The revised determination triggered a strong response from KE and its international investors, led by Saudi investor Al-Jomaih, who subsequently approached the International Court of Arbitration against the Government of Pakistan, citing the change in the regulatory position.
KE challenged the revised determination before the National Appellate Tribunal, but its review petition was rejected on technical grounds, according to KE Board Chairman Shaheryar Chishty. The company has since taken the dispute to the SHC, where the matter remains under litigation.
Chishty, when contacted by this correspondent for his comments on the meeting between the Power Minister and KE’s chief executive, maintained that the company could not operate sustainably under the existing tariff determination.
“The tariff given by NEPRA in October 2025 is absolutely not workable. NEPRA Tribunal rejected KE’s review petition on technical grounds and ignored the substance. SHC has not given any immediate relief to NEPRA while fixing the case for November,” he said.
He argued that a more balanced tariff arrangement was required to ensure the company’s operational viability, provide relief to consumers and eliminate the subsidy burden on the government.
“The tariff should be sensible so that the company may operate, consumers get relief and the subsidy burden on the government is eliminated,” Chishty said.
The dispute has exposed a fundamental disagreement between the government and KE over the appropriate level of tariff support, the company’s financial obligations and the allocation of costs between electricity consumers and the public exchequer.
Power Minister Leghari has repeatedly raised concerns over KE’s contribution to the power sector’s circular debt, arguing that the company’s non-payment has contributed Rs640 billion to the accumulated liability. He also pointed to more than Rs300 billion remaining outstanding and subsidies exceeding Rs600 billion that KE has received over five years, which, in his view, have placed an additional burden on the national exchequer.
The Minister also criticised NEPRA for allowing comparatively relaxed regulatory targets for the utility.
These concerns indicate that any negotiated resolution of the MYT dispute would have to address not only KE’s financial sustainability but also the government’s concerns about the company’s performance, payment obligations and the impact of its tariff on public finances.
Chishty, however, argued that the existing uniform tariff mechanism had complicated the relationship between electricity prices, subsidies and the financial position of distribution companies.
According to him, consumers are made dependent on the uniform tariff arrangement, under which higher tariffs lead to higher subsidy requirements, while lower tariffs reduce the subsidy burden.
He maintained that circular debt largely accumulated because of weak recoveries and high losses among distribution companies (Discos), with the resulting liabilities eventually being capitalised and recovered from consumers after several years.
KE consumers, he said, were also paying Rs3.23 per unit towards this account, despite the company’s own financial and operational circumstances.
Chishty further pointed to the tariff petitions submitted by Discos for calendar year 2027, in which the companies have sought Prior Year Adjustments (PYAs) worth trillions of rupees under different heads.
He questioned what he described as differential regulatory treatment, arguing that KE appeared to be facing the treatment of a stepchild while other distribution companies were seeking approval to pass on their costs and inefficiencies to consumers.
The KE chairman also said the company had addressed its pension-related liabilities effectively and reduced costs across the board, whereas other Discos were seeking NEPRA’s approval to transfer their inefficiencies to electricity consumers.
However, Chishty acknowledged that KE had also failed to undertake certain necessary measures over the past seven to eight years, suggesting that the company’s own shortcomings could not be ignored in resolving the dispute.
“I agree 100 per cent with the government’s viewpoint that KE has not fulfilled its own responsibilities. However, my viewpoint is that the past is over, now we have to move forward,” he said.
His remarks suggest that KE’s management is seeking a way forward that recognises the government’s concerns about the utility’s past performance while revisiting the financial assumptions underpinning the revised MYT.
Copyright Business Recorder, 2026
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