# Unusual RLNG Price Surge Pushes Up Electricity Generation Costs
**ISLAMABAD:** The cost of electricity generated from regasified liquefied natural gas (RLNG) surged by a record **242 percent to Rs47.4 per unit in July 2026**, compared with less than Rs14 per unit in April, putting additional pressure on electricity consumers.
The sharp increase followed the government’s procurement of **five expensive LNG cargoes from the spot market** after supplies from Qatar were disrupted amid the US-Iran conflict. The higher LNG cost has prompted power companies to seek an additional **Rs2.52 per unit Fuel Cost Adjustment (FCA)** from consumers in their September electricity bills.
The proposed adjustment would impose an additional burden of around **Rs36.5 billion** on electricity consumers nationwide, despite approximately **73 percent of power generation in July coming from relatively cheaper domestic and predominantly zero-fuel-cost sources**. LNG accounted for around 11 percent of total grid electricity supply.
The National Electric Power Regulatory Authority (NEPRA) has scheduled a **public hearing for August 27** to determine whether the power companies’ demand for the additional Rs36.5 billion is justified.
### RLNG prices hit record levels
The situation is expected to worsen in the coming months, as RLNG prices increased by nearly one-third again in August. The higher cost is likely to translate into another increase in electricity generation costs and could affect consumers through the **October billing cycle**.
The Oil and Gas Regulatory Authority (OGRA) notified a record **32 percent increase in RLNG prices for August**, setting the rate at **$25.83 per mmBtu for SNGPL** and **$25.09 per mmBtu for SSGCL**.
In rupee terms, the August imported RLNG price reached approximately **Rs7,204 per mmBtu**, up from Rs5,450 per mmBtu in July.
The August price was based on five LNG cargoes procured from the spot market after Pakistan was unable to secure a shipment from Qatar. This represented the **highest monthly increase in RLNG prices in the commodity’s decade-long history**. RLNG prices had already risen by around 15 percent in July compared with June.
Compared with the February rate of **$10.45 (Rs2,916) per mmBtu**, the August RLNG price is approximately **148 percent higher**, raising concerns about further increases in the cost of gas-based power generation.
NEPRA has already approved an additional **Rs9.8 billion burden on electricity consumers**, allowing a 75-paisa-per-unit increase in fuel costs in the August billing cycle.
### Rs36.5bn FCA demand
The Central Power Purchasing Agency (CPPA), which filed the petition seeking the higher FCA for electricity consumed in July, reported that power consumption increased by around **6 percent year-on-year**.
According to CPPA data, electricity consumption reached **14,501 GWh in July 2026**, compared with 13,666 GWh in July 2025.
The reference fuel cost for July had been set at **Rs7.093 per unit**, while the actual fuel cost stood at **Rs9.61 per unit**. The difference has resulted in the requested **Rs2.52 per-unit FCA adjustment**.
If approved, the additional amount would be recovered from consumers of all major power utilities, including former Wapda distribution companies (Discos) and K-Electric, through September electricity bills.
### Expensive fuels add to pressure
Apart from RLNG, the use of high-speed diesel and furnace oil also contributed marginally to the increase in fuel costs. Generation from these two sources cost approximately **Rs55 and Rs50 per unit**, respectively, although their combined contribution to the national grid remained below **1.63 percent**.
In contrast, nearly **40 percent of electricity generation in July came from zero-fuel-cost sources**. Local coal accounted for 11 percent, local gas 6.5 percent and nuclear power 10.1 percent.
Renewable sources also contributed to the national grid, with wind providing **4.5 percent**, solar **0.7 percent**, and bagasse-based plants around **0.3 percent** of total generation.
The cost disparity between fuel sources remained significant. Local coal-based generation cost **Rs10.42 per unit**, compared with **Rs16.34 per unit for imported coal**. Local gas generation cost around **Rs13.8 per unit**, while RLNG-based generation reached **Rs47.38 per unit**.
Nuclear generation remained among the lowest-cost sources, with its fuel cost recorded at around **Rs3 per unit in July**, compared with Rs2.85 per unit in June and approximately Rs1.13 per unit earlier this year.
The sharp increase in RLNG prices highlights the vulnerability of Pakistan’s power sector to international LNG market conditions and supply disruptions, while also raising concerns over the impact of imported fuel costs on already burdened electricity consumers.
Story by Khaleeq Kiani
