Power consumers may face Rs1.72 Per Unit tariff hike under fuel cost adjustment

Electricity consumers across Pakistan could see a fresh increase in their power bills as a proposal seeking a tariff adjustment of Rs1.72 per unit

ISLAMABAD: Electricity consumers across Pakistan could see a fresh increase in their power bills as a proposal seeking a tariff adjustment of Rs1.72 per unit has been submitted to the regulator under the monthly fuel cost adjustment (FCA) mechanism.

The request has been filed by the Central Power Purchasing Agency (CPPA) with the National Electric Power Regulatory Authority, which is set to examine the petition during a public hearing scheduled for today.

According to details of the application, the proposed increase pertains to fuel expenses incurred during April and reflects changes in the cost of electricity generation. If approved, the adjustment will be recovered from consumers through their upcoming electricity bills, adding to the financial pressure already faced by households and businesses amid rising living costs.

The CPPA has argued that fluctuations in fuel prices and the generation mix resulted in higher electricity production costs during the month under review. Under Pakistan’s power pricing mechanism, such variations are periodically passed on to consumers through monthly fuel cost adjustments.

If endorsed by the regulator, the proposed surcharge of Rs1.72 per unit will apply to customers of power distribution companies nationwide, including those served by K-Electric and other public-sector distribution companies (DISCOs).

The fuel cost adjustment mechanism is designed to account for differences between estimated and actual fuel costs used in power generation. Depending on market conditions and the energy mix utilized by power plants, consumers may either receive relief or face additional charges in their monthly bills.

Energy sector experts note that fuel adjustments have become a recurring feature of Pakistan’s electricity pricing structure, largely due to the country’s reliance on imported fuels and fluctuations in international energy markets. Changes in the cost of furnace oil, liquefied natural gas (LNG), coal and other fuels directly influence electricity generation expenses.

The upcoming hearing will provide an opportunity for stakeholders to present their views before NEPRA issues its determination. The regulator may approve the request in full, modify the proposed amount, or reject it after reviewing the relevant data and fuel cost calculations.