Electricity prices likely to rise by Rs1.74 per unit

Consumers in Pakistan are likely to face a significant increase in their electricity bills, with prices expected to rise by Rs1.74 per unit in the upcoming June billing cycle. This adjustment is attributed to a higher fuel cost adjustment (FCA), as requested by the Central Power Purchasing Agency (CPPA). The CPPA is seeking over Rs16 billion in additional recoveries from power consumers. During a public hearing held by the National Electric Power Regulatory Authority (Nepra), CPPA Chief Executive Officer Rehan Akhtar explained that the reference fuel cost for April was Rs8.25 per unit, but the actual cost surged to Rs9.975 per unit. He attributed this rise primarily to disruptions in Liquefied Natural Gas (LNG) supplies caused by the US-Iran war. Technical challenges in redirecting cheaper power sources in Sindh to areas facing shortages in the upcountry also contributed to the higher FCA. Akhtar noted that the government's decision to limit the use of furnace oil and diesel for power generation helped contain the additional FCA to Rs1.73 per unit. Special arrangements for LNG imports were made, with the government setting a price of Rs2,000 per unit instead of the usual Rs3,500 to mitigate the tariff hike. The partial unavailability of the Karachi Nuclear Power Plant Unit-2 (K-2) and its past claims worth Rs3.4 billion were also cited as factors contributing to the increase. The K-2 plant experienced forced outages due to issues with its nuclear reactor. Despite these increases, power supply from the national grid to Karachi continued to benefit both K-Electric consumers and those connected to the national grid. Officials reported that without this supply, consumers would have faced a total impact of Rs4.26 per unit in FCA and capacity purchase price increases for April 2026. Overall power consumption in April decreased by 8.5% compared to the previous year, with demand falling across most consumer categories, except for the industrial sector which saw a 13.5% growth.

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The reference fuel cost for April had been set at Rs8.25 per unit, but the actual cost turned out to be Rs9.975 per unit, mainly because of the US-Iran war and the resultant disruption in LNG supplies, thus necessitating an additional charge of Rs1.73 per unit on consumers in the billing month of June.