ISLAMABAD: Power distribution companies have sought an additional Rs1.78 per unit from consumers in March bills under the monthly Fuel Cost Adjustment (FCA), citing a notable rise in electricity demand and a shift towards costlier fuel sources.
The request was filed by the Central Power Purchasing Agency (CPPA) with the National Electric Power Regulatory Authority (Nepra), which has scheduled a public hearing on February 26 to examine the petition.
According to the CPPA, electricity consumption in January 2026 rose by 12.1 per cent compared to the same month last year and by 8 per cent over December 2025. A total of 8,762 gigawatt-hours (GWh) of electricity was delivered to distribution companies (Discos) during the month.
The power companies have reported an average fuel cost of Rs12.18 per unit for January, exceeding the pre-approved reference fuel cost of Rs10.395 per unit. This difference has led to a proposed FCA of Rs1.78 per unit, which, if approved, would translate into an additional financial burden of approximately Rs16 billion on consumers nationwide, including those served by ex-Wapda Discos and K-Electric.
The CPPA stated that around 9,140GWh of electricity was generated in January at an estimated fuel expenditure of Rs106.4 billion (Rs11.64 per unit). However, the delivered cost to Discos rose to Rs12.18 per unit, creating the need for recovery through the FCA mechanism.
Regasified Liquefied Natural Gas (RLNG) remained the largest contributor to the grid, accounting for nearly 22 per cent of total generation. Nuclear power followed with a 17.5 per cent share, while imported coal contributed 17.28 per cent and local coal 15.4 per cent. Local gas-based generation stood at 12 per cent, up slightly from December.
Hydropower’s share declined to 8 per cent, mainly due to annual canal closures for maintenance. Furnace oil-based generation, despite being officially phased out, re-emerged with a 3 per cent share amid rising demand.
Furnace oil proved to be the most expensive source at Rs33.55 per unit, followed by RLNG at Rs20 per unit, imported coal at Rs13.5 per unit, local gas at Rs12.74 per unit, and local coal at Rs11.63 per unit. Nuclear power remained among the cheapest at Rs2.23 per unit.
Renewable sources — wind, bagasse, and solar — collectively contributed 4.55 per cent to the grid. While wind and solar carried no fuel cost, bagasse-based plants incurred a fuel cost of Rs10.39 per unit with a modest 1.11 per cent share. Electricity imports from Iran accounted for 0.38 per cent of total supply at a fuel cost of Rs22.06 per unit.
The proposed FCA underscores ongoing volatility in the generation mix and fuel pricing, even as nearly 60 per cent of electricity was produced from relatively cheaper domestic sources during the month. Nepra’s upcoming hearing will determine whether the additional charges are passed on to consumers in March bills.
Story by Khaleeq Kiani
