In response to a Business Recorder Editorial “Relief that disappears” published by the newspaper yesterday, the Spokesperson of the Power Division has issued a clarification.
The spokesperson said that public discourse on electricity tariffs must remain grounded in facts, regulatory clarity, and sound economic principles rather than selective personal or segmental narratives that risk confusing consumers.
In recent debates, certain elements within segments of the industrial community, particularly voices of those who are taking less benefit from Long Term Industrial Relief packages appear to be portraying routine tariff adjustment mechanisms as deliberate attempts to dilute announced relief measures, he added.
READ MORE: Relief that disappears
Such portrayals not only misguide the common public and other consumer categories, but also risk undermining broader reform and relief efforts aimed at stabilising and strengthening Pakistan’s power sector at General and Industrial Sector at particular.
He said that such segments need to be identified by the media as well to counter-balance the equilibrium by reporting facts and institutional plus economic arrangement which are in place rather than becoming mouth piece of that particular segment.
The spokesperson said that it is important to understand that the Fuel Charges Adjustment (FCA) and the Quarterly Tariff Adjustment (QTA) are well-defined and structured components of the tariff framework. FCA reflects the difference between the reference fuel cost assumed in the base tariff and the actual fuel cost incurred in electricity generation for a given month.
QTA, on the other hand, accounts for variations arising from capacity payments, exchange rate movements, interest rates, and other macroeconomic indicators on a quarterly basis. These mechanisms are designed to ensure that the true cost of electricity is passed on transparently neither imposing an unjust burden on consumers nor allowing hidden inefficiencies to accumulate in the system.
He added that both FCA and QTA are processed through a transparent regulatory framework under the supervision of National Electric Power Regulatory Authority.
Public hearings are conducted, data is examined, and approvals are granted strictly in accordance with regulatory procedures. These adjustments are not based on the preference or will of any individual, ministry, or political office. They are outcomes of documented cost data and regulatory scrutiny.
Suggesting otherwise weakens institutional credibility and misrepresents how the system operates.
He said that FCA, in particular, represents recovery of fuel cost, and fuel prices in international markets are inherently volatile. Oil, coal, and RLNG prices fluctuate frequently due to global supply-demand dynamics, geopolitical developments, and currency movements. From an economic standpoint, when dealing with a volatile input cost, recovery must be timely.
Delaying recovery over a longer horizon — such as accumulating it over three months—can create complications and disputes over which pricing period should be reflected.
It can also distort cost signals and worsen cash flow mismatches within the power sector. It is a fundamental economic principle that the cost of an item whose price fluctuates significantly should be recovered as close to the period of consumption as possible.
Monthly FCA ensures transparency, accuracy, and financial discipline. Importantly, when fuel prices decline, the same mechanism works in favour of consumers through a negative FCA, immediately reducing their bills.
Any relief announced by the government for a specific segment of consumers is entirely separate from FCA or QTA adjustments. If the total tariff is represented as T and a relief of x is granted, then the tariff is reduced to T minus x. This reduction stands independently. FCA and QTA adjustments operate separately and reflect actual cost variations that may be positive or negative depending on fuel prices and macroeconomic indicators. Had the FCA been negative during a particular period, the relief would have further reduced the tariff beyond T minus x. Therefore, portraying a positive FCA as an intentional act designed to offset relief misrepresents the regulatory and economic reality.
FCA is a mathematical outcome of actual fuel costs, not a discretionary instrument.
The spokesperson said that at a time when Pakistan’s power sector is undergoing significant structural reforms aimed at improving efficiency, transparency, and financial sustainability, it is important that narratives do not distort rule-based mechanisms for short-term positioning.
Constructive engagement is essential, but implying that regulatory adjustments are imposed at will fosters confusion and weakens trust in institutions.
Strengthening regulatory integrity, ensuring timely cost recovery, and maintaining transparent processes remain essential for reducing circular debt and achieving long-term tariff stability. Public debate should reinforce these principles rather than undermine them.
Copyright Business Recorder, 2026
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