ISLAMABAD — Electricity consumers may face a further increase of up to Rs1 per unit in their bills from July 1, driven by the recent rise in gas tariffs for the power sector. The development was flagged by the Central Power Purchasing Agency (CPPA-G) during a public hearing held by the National Electric Power Regulatory Authority (NEPRA) on Monday.
The hearing, presided over by NEPRA Chairman Waseem Mukhtar, focused on the Monthly Fuel Charges Adjustment (FCA) for May 2025. The CPPA-G had submitted a request for a 10 paisa per unit increase under the FCA for power distribution companies (DISCOs), with NEPRA reserving its final decision pending further scrutiny of submitted data.
While the requested 10 paisa hike may only apply for a single month, NEPRA was cautioned during the hearing that broader upward pressure on power tariffs is likely in the coming months due to more expensive gas now being used for power generation. If approved, the 10 paisa adjustment would translate into an additional Rs1.25 billion burden on consumers across the country.
According to CPPA-G, the reference fuel cost for May 2025 was set at Rs7.3925 per kilowatt-hour (kWh), while the actual cost of generation was slightly higher at Rs7.4940 per kWh. The agency stated that 12,755 gigawatt-hours (GWh) of electricity were generated during the month at a total cost of Rs99.153 billion, reflecting an average fuel cost of Rs7.7739/kWh. After accounting for transmission losses (355 GWh or 2.78%), 12,367 GWh was delivered to DISCOs at a net cost of Rs92.676 billion.
Hydropower remained the largest contributor to the energy mix in May, accounting for 37.98% (4,844 GWh) of generation. RLNG followed with a 16.99% share (2,168 GWh), while nuclear contributed 15.77% (2,012 GWh). Other sources included local coal (11.08%), imported coal (6.24%), natural gas (6.92%), furnace oil (0.16%), and smaller shares from solar, wind, and bagasse.
Responding to questions during the hearing, CPPA officials warned that the recent increase in gas tariffs—particularly for power plants—could push the cost of generation up by as much as Rs1 per unit in future bills. They further cautioned that if power bill recoveries remain weak, the government may have no choice but to raise existing surcharges to contain the growing circular debt.
At present, electricity consumers are already paying a surcharge of Rs3.23 per unit purely to service the interest on circular debt, which translates into Rs323 billion annually, CPPA representatives revealed.
NEPRA indicated that a final decision on the 10 paisa FCA adjustment for May will be taken after reviewing the complete data. However, the broader concerns raised during the hearing — including costlier fuel inputs and weak recovery mechanisms — point to sustained upward pressure on tariffs in the months ahead.
The circular debt crisis in the power sector remains a key concern for the federal government, with mounting financial obligations posing risks to energy sector sustainability. NEPRA officials have repeatedly emphasised the need for structural reforms, improved governance of DISCOs, and stronger enforcement of billing and recovery processes to stabilise the sector and protect consumers from persistent tariff shocks.
