ISLAMABAD: The government informed the National Electric Power Regulatory Authority (Nepra) on Thursday that it operated furnace oil-based power plants at a fuel cost of Rs33 per unit in October — significantly higher than the Rs21 per unit cost of available but underutilised LNG-based plants — due to “lower LNG allocation.”
At a public hearing, the Power Division team led by Central Power Purchasing Agency (CPPA) CEO Rehan Akhtar confirmed that over 40 million units were generated on furnace oil to cover a shortfall triggered by the forced outage of the Sahiwal Coal Plant and two nuclear power units. This shift pushed up average fuel costs and imposed an additional Rs520 million burden on consumers.
When asked why expensive furnace oil plants were used instead of cheaper LNG-based units, Mr Akhtar responded, “The world system works on good faith, not in bad faith.” Officials added that RLNG plants were already running at full capacity based on the 600mmcfd supplied by SNGPL, with occasional peaks to 615mmcfd, but no additional LNG was provided.
This comes despite government claims of surplus LNG and the diversion of long-term cargoes to the spot market, as well as restrictions on local gas production. Mr Akhtar acknowledged that fuel costs would have been lower had LNG plants been fully utilised.
A CPPA presentation informed Nepra that net-metering consumers helped reduce monthly fuel cost adjustments, as Discos purchased 574 million units from rooftop solar systems at zero fuel cost. Similarly, K-Electric’s increased drawl from the national grid also helped reduce fuel costs for both KE and Discos by 9 to 34 paisa per unit between August and September.
During the hearing, Nepra Member (Development) Maqsood Anwar Khan noted inconsistencies in government claims about reduced power demand. Contrary to official statements, CPPA data showed industrial electricity consumption rising by 25% in July–October 2025 compared to the same period last year, with growth reaching 27% in the first three months.
Mr Akhtar said multiple factors could be contributing — including a possible shift of captive power users from LNG to grid electricity — but stressed that a detailed analysis was required.
He added that October’s final fuel cost adjustment (FCA) is expected to show a 17 paisa per unit reduction, driven by the shift from a 48-paisa negative FCA in September to a 65-paisa negative FCA in October.
Story by Khaleeq Kiani
