Pakistan is preparing to introduce its first-ever deregulated electricity market, a move that could significantly lower power costs for industrial consumers. The new system, set to begin in March 2026, will allow large industries to buy electricity directly through auctions instead of fixed tariffs. The step is also seen as part of broader economic reforms agreed with the International Monetary Fund.
Under the new arrangement, an initial supply of 200 megawatts of electricity will be offered in the market, with plans to gradually increase total supply to 800 megawatts over the next four years. The system will initially cover B3 and B4 category industrial consumers, which include medium and large manufacturing units.
One of the major changes is the removal of capacity charges for these consumers. Instead of paying fixed costs, industries will only pay for the electricity they purchase. Power rates are expected to be around Rs. 6 per unit for B3 consumers and Rs. 9 per unit for B4 consumers, making it the cheapest electricity option currently available for this segment.
Only large consumers with a minimum demand of one megawatt will be allowed to participate in the market during the early phase. Independent market operators have already been appointed to manage electricity trading and ensure transparency in the process.
Distribution companies will continue to play a limited role by providing grid access and charging wiring or usage fees. However, large consumers will not face traditional electricity tariffs and will only pay installation and grid usage costs.
