ISLAMABAD: Electricity consumers are set to bear an additional fuel cost of around Rs25 billion in their October bills, as the National Electric Power Regulatory Authority (Nepra) heard a petition seeking a Rs1.73 per unit adjustment for August.
During a public hearing on Tuesday, Central Power Purchasing Agency (CPPA) Chief Executive Officer Rehan Akhtar attributed the higher fuel cost primarily to increased generation from expensive imported RLNG and coal, coupled with lower-than-expected output from hydropower and nuclear plants.
Hydropower was initially projected to account for around 41 per cent of total generation in August, but its actual share stood at about 38pc. Similarly, nuclear generation was estimated at 16.4pc but fell to around 10pc following an outage at the Karachi nuclear power plants.
The shortfall pushed the share of imported coal-fired generation to 15.6pc, compared with the projected 7.4pc.
While hydropower carries no fuel cost, the average fuel cost of nuclear generation increased to Rs3.15 per unit from Rs2.50 due to lower utilisation. Imported coal-fired generation cost around Rs17 per unit, compared with Rs5.50 per unit for local coal-based generation.
RLNG subsidy limits additional burden
Mr Akhtar said the government had effectively contained the additional fuel cost by providing a subsidy of more than Rs10 billion through a special RLNG rate of Rs2,000 per million British thermal units (mmBtu) during July and August, instead of the prevailing rate of around Rs6,000 per mmBtu.
Without the special RLNG rate, the additional fuel cost would have risen to around Rs35bn, equivalent to approximately Rs2.53 per unit.
Despite the concession, RLNG-based electricity generation cost around Rs45.93 per unit, marginally higher than the Rs45.25 per unit cost of furnace-oil generation. The furnace-oil cost also included a petroleum levy of Rs73,000 per tonne.
Power Division representative Naveed Qaiser said the additional fuel cost had also been contained through around one and a half hours of average daily load management during August.
Nepra to review industrial tariff package
Meanwhile, Nepra has scheduled a public hearing for October 5 to review the industrial incremental consumption tariff package introduced in December 2025.
Industrial representatives, particularly from Karachi, reiterated their criticism of the package, arguing that it had failed to provide meaningful relief to most industries while increasing the burden on other electricity consumers.
The package offers selected industries electricity at a special incremental rate of Rs22.96 per unit. It was supposed to be reviewed six months after its introduction, but has remained unchanged for nine months.
Industry representatives said Nepra had directed the Power Division to conduct the review after consulting stakeholders, but the industry had not been adequately consulted.
They also argued that industrial electricity costs had increased by around 10pc following tariff rebasing, while production commitments had already been finalised, limiting manufacturers’ ability to pass the additional costs on to buyers.
The representatives further urged the government to seek flexibility from the International Monetary Fund (IMF) regarding the petroleum levy on furnace oil, citing the impact of regional conflict on imported fuel costs.
Mr Akhtar acknowledged that policy changes were subject to IMF-related constraints but said the government was raising the matter at the appropriate forum.
If approved by Nepra, the August fuel cost adjustment would result in an additional burden of around Rs25bn on electricity consumers across the country, including customers of former Wapda distribution companies and K-Electric.
