Grid Bottlenecks Force Pakistan to Rely on Costlier Power, Adding Rs400 Billion a Year
Transmission constraints are preventing cheaper electricity from Sindh and southern Pakistan from reaching northern load centres, pushing the country toward expensive RLNG and imported coal generation and adding roughly Rs3.07 per unit to consumer bills.
Pakistan's electricity consumers are absorbing billions of rupees in extra costs each year because the national transmission network cannot move cheaper power from Sindh and southern Pakistan to the country's main consumption centres in the north, according to concerns raised at a regulatory hearing and in a formal industry submission.
The bottleneck forces the power system to lean on costlier regasified liquefied natural gas (RLNG) and imported coal generation, while cheaper output from Thar coal, nuclear and wind sources remains underused. At a National Electric Power Regulatory Authority (NEPRA) hearing on the June 2026 Fuel Cost Adjustment, transmission constraints were reported to impose an annual financial burden of more than Rs400 billion.
Spread across projected generation of 130,081 gigawatt hours, that burden works out to roughly Rs3.07 per unit, a significant addition to bills already strained by high tariffs. The gap in fuel costs illustrates the scale of the loss: in June 2026, RLNG-based electricity cost Rs35.5087 per unit, compared with Rs11.4629 for Thar coal and Rs2.8501 for nuclear power. Substituting Thar coal for RLNG generation could cut fuel costs by about Rs24 per unit.
The issue has drawn criticism from the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), which questioned the proposed CY2027 Power Purchase Price Reference and demanded accountability for transmission-related inefficiencies. In its response to a Central Power Purchasing Agency (CPPA) petition, the business body warned that consumers should not be forced to bear the financial consequences of a network that cannot deliver cheaper electricity despite available generation capacity.
The FPCCI also raised concerns about a proposed increase in fixed charges, particularly capacity payments, arguing that the additional revenue could sustain disproportionately high salaries, perks and administrative expenses of managing directors, CEOs and other senior executives across power sector entities. It cautioned that a proposed reduction in variable charges could create a misleading impression of lower tariffs while shifting more of the burden onto consumers through higher fixed charges.
The figures point to a structural problem in which available cheap generation is stranded by inadequate transmission capacity, leaving households and businesses to pay for expensive alternatives. Resolving the constraints would require investment in grid infrastructure linking southern generation hubs to northern demand centres, an issue that directly affects the country's tariff competitiveness and industrial costs.
