Power consumers may face tariff hike

DISCOs seek Rs1.20 per unit fuel cost hike for August

ISLAMABAD:

Electricity consumers across Pakistan could face another increase in power bills next month after power companies sought a Rs1.20 per unit fuel cost adjustment (FCA) for August, citing higher generation costs driven largely by expensive imported fuels, particularly Regasified Liquefied Natural Gas (RLNG).

If approved by the National Electric Power Regulatory Authority (Nepra), the proposed adjustment will allow power utilities, including the ex-Wapda distribution companies (Discos) and K-Electric, to recover an additional Rs15.7 billion from consumers through August electricity bills.

Nepra has scheduled a public hearing on July 29 to examine the request.

The petition was filed by the Central Power Purchasing Agency (CPPA), which said electricity demand in June 2026 was marginally lower than in the corresponding month last year.

According to the agency, power consumption stood at 13,066 million units in June this year, compared with 13,310 million units in June 2025.

According to the CPPA, the principal factor behind the increase in fuel costs was the sharp rise in RLNG prices. The fuel cost of RLNG-based generation climbed to about Rs35 per unit, nearly double the Rs16 per unit recorded in June last year.

The agency said the reference fuel cost for June 2026 had been fixed at Rs7.714 per unit, but the actual cost reached Rs8.90 per unit, creating a gap that requires an additional Rs1.20 per unit to be recovered from consumers through the monthly FCA mechanism.

Fuel costs also rose because of limited reliance on furnace oil- and diesel-fired power plants, which generated electricity at around Rs52 per unit and Rs57 per unit, respectively.

However, together they accounted for less than one per cent of the national electricity supply.

Despite the proposed increase, the country's generation mix remained dominated by relatively cheaper domestic sources. Hydropower, which carries no fuel cost, contributed 39 per cent of total electricity generation in June.

Local coal accounted for 10 per cent, local gas 6.5 per cent, and nuclear power 13.5 per cent, while wind contributed 5 per cent, solar 0.82 per cent, and bagasse-based generation 0.35 per cent.

The CPPA reported that electricity generated from local coal cost Rs11.5 per unit, compared with Rs16.65 per unit from imported coal. Generation using local gas cost Rs13.7 per unit, whereas RLNG-based generation stood at Rs35.5 per unit. Nuclear power remained among the least expensive sources, with a reported fuel cost of Rs2.85 per unit.