Nepra weighs Rs2.52 per unit surcharge

Consumers may face Rs36.5b higher fuel cost in September bills as imported fuel costs surge

ISLAMABAD:

Pakistan's electricity consumers could be asked to absorb Rs36.54 billion in higher fuel costs in September bills after the power regulator reserved its decision on a proposed Rs2.52 per unit surcharge for July, with costly imported fuel driving a sharp rise in generation expenses.

The National Electric Power Regulatory Authority (Nepra) on Thursday reserved its decision on the Central Power Purchasing Agency-Guaranteed's (CPPA-G) request.

CPPA-G, representing the distribution companies, said actual fuel costs rose to Rs9.6112 per unit in July from a reference cost of Rs7.0929. It wants the difference recovered from consumers through the monthly fuel adjustment.

The Karachi Chamber of Commerce and Industry (KCCI) opposed the proposed increase, urging the government to use local furnace oil instead of expensive LNG where feasible and to remove the levy on furnace oil.

The chamber warned that consumers could face a Rs6 per unit increase from September 1, as Nepra considers a Rs2.518 per unit monthly fuel charge adjustment for July 2026. The increase could be compounded by a Rs1.52 per unit upward quarterly adjustment for the second quarter of CY2026. At the same time, the Rs1.98 per unit relief under the first quarter adjustment will expire, adding to the overall impact on consumers.

The chamber said the government had lowered the reference value to reduce its subsidy burden, estimating that around Rs250 billion in subsidy costs had shifted to consumers.

The proposed adjustment contrasts with July 2025, when consumers received a Rs1.79 per unit refund.

The increase comes as generation costs surged 38.15% to Rs162.55 billion in July. Generation rose only 7.07% to 15,122 gigawatt-hours. Imported fuel was the main driver. Re-gasified liquefied natural gas (RLNG) costs more than doubled to Rs47.38 per unit from Rs22.03 a year earlier, yet RLNG generation fell 33% to 1,629 GWh. Imported coal generation rose to 2,169 GWh, with its cost increasing to Rs16.33 per unit. Local coal generated power at just Rs10.42 per unit.