The Government of Nepal is preparing to implement a seasonal electricity tariff system that will set different electricity rates for the monsoon and winter seasons.

Under the proposed plan, electricity will be cheaper during the monsoon season and relatively more expensive during the winter. The Ministry of Energy is currently working on the necessary preparations to implement this system.

The decision comes after the government announced a 5 percent VAT on electricity in the upcoming fiscal budget, which has drawn criticism from various stakeholders. In response, the government is considering tariff adjustments to ensure that the final electricity bills for consumers do not increase.

During the monsoon season, increased river flow boosts hydropower generation, often resulting in surplus electricity. To prevent wastage, the government plans to encourage higher consumption through lower tariffs. In contrast, winter months see reduced generation, which may lead to higher tariffs.

Finance Minister Swarnim Wagle has stated that the VAT burden will not be passed on to consumers and that tariff adjustments will be made if necessary to stabilize electricity bills.

The concept of seasonal electricity pricing has also been recommended by a high-level economic reform commission in the past. Previous governments and the Nepal Electricity Authority had also proposed similar ideas, but implementation has not yet materialized.