Electricity consumers face Rs1.11 per unit fuel adjustment in October

Electricity consumers across Pakistan will face an additional fuel cost adjustment of Rs1.11 per unit in their October bills, adding an estimated Rs16 billion to the overall electricity burden.

The National Electric Power Regulatory Authority (Nepra) approved the adjustment for electricity consumed in August 2026. The increase will apply to consumers of K-Electric and former Wapda distribution companies, with certain categories exempted.

Lifeline consumers, electric vehicle charging stations and prepaid consumers who have opted for the prepaid tariff will not be charged the adjustment. The increase will also apply to consumers benefiting from the incremental consumption package.

The adjustment follows a review of fuel costs submitted by the Central Power Purchasing Agency. The agency had calculated the average fuel component for August at Rs8.83 per unit, compared with a reference rate of Rs7.10 per unit, and sought an additional adjustment of Rs1.73 per unit.

After reviewing the figures and making adjustments, Nepra calculated the actual fuel component at Rs8.21 per unit. It consequently approved an adjustment of Rs1.11 per unit instead of the Rs1.73 requested by the power purchasing agency.

Higher fuel costs during August were largely linked to increased reliance on expensive generation sources. Imported liquefied natural gas became costlier after contracted supplies from Qatar were affected by force majeure, forcing greater dependence on spot-market purchases.

The power sector also recorded higher coal imports and lower-than-expected electricity generation from hydropower and nuclear plants.

Hydropower had been projected to contribute about 41 per cent of total generation during the month, but its actual share remained below 38 per cent. Nuclear power was expected to account for around 16.4 per cent but contributed about 10 per cent, partly because of an outage at nuclear facilities in Karachi.

As cheaper generation sources produced less electricity than expected, imported coal-based generation increased to around 15.6 per cent, compared with the planned share of 7.4 per cent.

The cost difference between generation sources also added to the pressure. Hydropower carries no fuel cost, while nuclear generation averaged around Rs3.15 per unit. Imported coal-based electricity cost about Rs17 per unit, compared with around Rs5.5 per unit for locally produced coal-based power.

RLNG-based generation was among the most expensive sources, costing around Rs45.93 per unit. This was higher than the approximately Rs45.25 per unit cost of furnace-oil-based generation.

Fuel cost adjustments are reviewed every month under Pakistan’s electricity tariff system. The changes are generally passed on to consumers for a single billing month, allowing fluctuations in generation fuel costs to be reflected in electricity prices.