ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has notified an additional financial burden of approximately Rs10.57 billion on electricity consumers by approving a Rs1.42 per unit increase under the fuel cost adjustment (FCA) mechanism for February 2026, to be reflected in April bills.
However, the overall impact offers slight relief, as the new FCA replaces a higher Rs1.63 per unit charge applied in March, resulting in a net decrease of 21 paisa per unit for consumers.
According to Nepra, the FCA of Rs1.4235 per unit will apply to all categories of consumers of K-Electric and ex-Wapda distribution companies (XWDISCOs), excluding lifeline users, electric vehicle charging stations, and prepaid consumers. Distribution companies have been directed to incorporate the adjustment in April billing.
The regulator noted that additional electricity supply from the national grid to K-Electric helped contain further cost escalation. Without this support, consumers could have faced a cumulative increase of Rs4.08 per unit, including Rs1.05 from FCA and Rs3.03 due to quarterly capacity charges.
Concerns were raised by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), which highlighted that the industrial sector has absorbed a burden of Rs564.7 billion over the past three years due to cross-subsidies and surcharges. It warned that further increases could undermine industrial sustainability and competitiveness.
The FPCCI also called for greater transparency in FCA calculations and urged authorities to pass on a pending reduction of Rs0.62 per unit in the base tariff, effective January 1, 2026.
The Ministry of Energy (Power Division) defended the pricing mechanism, stating that tariffs are determined in line with legal and regulatory frameworks, reflecting actual electricity generation costs influenced by fuel prices, exchange rates, demand, and energy mix.
It emphasized that fluctuations in these variables—particularly international fuel prices—are beyond regulatory control and are passed on to consumers through FCA to maintain cost alignment.
The government also highlighted measures to support industrial consumers, including the elimination of cross-subsidies, resulting in a tariff reduction of Rs4.04 per unit. Industrial tariffs have declined from Rs49.19 per unit in March 2024 to Rs34.75 per unit in March 2026.
Additionally, a three-year incremental consumption package has been introduced at a concessional rate of Rs22.98 per unit to encourage industrial growth, improve grid efficiency, and stimulate economic activity.
The FCA mechanism, reviewed monthly, ensures that variations in fuel costs are automatically adjusted in consumer tariffs, while broader cost components are incorporated into the base tariff through periodic revisions by the federal government.
Story by Khaleeq Kiani
