One Price, Ten Networks: Can the Uniform Tariff Survive DISCO Privatisation?
Pakistan charges a household in Faisalabad and a household in Quetta broadly the same notified rate for a unit of grid electricity, even though the companies serving them could hardly be further apart. That arrangement, the uniform tariff, has rarely been questioned in public. In early October 2026 the International Monetary Fund questioned it directly. During the current review talks, according to reporting on 3 October, the Fund asked whether the uniform tariff would continue once distribution companies are privatised, and Pakistani officials did not give a clear answer.
The question deserves one, because the answer decides whether privatisation reduces the fiscal cost of the power sector or simply moves it onto a new set of contracts. The IMF's April 2026 staff report on the third review of the Extended Fund Facility describes the process. A Power Division motion filed with NEPRA in February 2026 shows how firmly that design is embedded. It sought a revised government applicable uniform tariff within an already budgeted tariff differential subsidy of Rs249 billion, and it restated the policy position that the government may maintain a uniform consumer-end tariff for K-Electric and the state-owned distribution companies, even after privatisation, through direct or indirect subsidies.
The trouble is the spread in performance it is asked to paper over. Data the energy minister submitted to the National Assembly, reported by Profit on 22 August 2026, put aggregate DISCO losses at 17.2 per cent in FY2025-26. Privatisation changes who owns that problem but not, by itself, who pays for it. The company has long been in private hands, yet its consumers still face the national uniform tariff, with the difference settled through federal subsidy claims.
The same review round shows how those disputes feed directly into circular debt. Power Division officials told the Fund, according to reporting on 3 October, that power-sector circular debt rose by Rs61 billion in FY2025-26 to Rs1.675 trillion at the end of June 2026, and attributed the increase to lower budgeted subsidies and the payment dispute with K-Electric. The government told the IMF it had agreed a mechanism between the Power and Finance divisions to recover more than Rs110 billion in reconciled provincial electricity dues by deducting them from provincial shares under the National Finance Commission award, with around Rs50 billion expected in the near term.
The first is to keep the uniform tariff and fund it fully and transparently, with an explicit subsidy line for each company published in advance, so buyers and lenders can see the support they depend on. The industrial package adds a reminder that pricing decisions are not static.