Electricity Tariffs to Rise by Rs. 1.98 per Unit in October Bills
Electricity consumers across Pakistan are set to see a net increase of Rs. 1.98 per unit in their October bills, as the earlier negative fuel cost adjustment (FCA) for July expires and a new positive FCA for August takes effect. The development was confirmed during a public hearing of the National Electric Power Regulatory Authority (NEPRA) on Monday.
Fuel Cost Adjustments
In September, consumers benefited from a negative FCA of Rs. 1.79 per unit, which lowered bills temporarily. However, this relief will no longer apply. Instead, a positive FCA of Rs. 0.19 per unit for August will be charged, resulting in a combined impact of Rs. 1.98 per unit in October.
The Central Power Purchasing Agency (CPPA-G), in its petition on behalf of ex-Wapda distribution companies (Discos) and K-Electric, explained that the reference fuel cost for August was Rs. 7.3149 per unit, while the actual cost of generation was Rs. 7.5059 per unit. To bridge the gap, the agency sought approval to recover an additional Rs. 0.1911 per kilowatt-hour (kWh), adding up to Rs. 2.62 billion in total.
Concerns Raised by Stakeholders
Consumer representatives at the hearing highlighted the impact of taxes and surcharges, pointing out that a general sales tax (GST) of Rs. 0.60 per unit is applied on top of a Rs. 3.23 per unit surcharge, which the federal government is using for debt repayments. One participant noted that the GST on the surcharge could accelerate loan payback, reducing the repayment timeline from six years to five.
Impact on Industry
Industrial consumers expressed concern that the end of the prime minister’s relief package has already pushed energy costs higher. Per-unit tariffs for industries have reportedly risen from Rs. 29 to Rs. 35, an increase of nearly 10 percent. Industry representatives also reminded the government of earlier commitments to provide power at $0.09 per unit.
Reasons for Cost Increase
Officials attributed part of the hike to reduced hydropower generation in August, as flooding in some provinces led to lower water releases from dams. Hydropower’s share in the energy mix dropped to 38.8 percent, compared to the reference level of 40.9 percent, forcing a greater reliance on costlier imported fuels like coal and RLNG.
Relief for Flood-Affected Areas
Responding to questions about exemptions recently announced for flood-affected regions, Power Division officials clarified that the federal government will bear the cost of this relief, ensuring it will not be shifted to other consumers.
