Consumers may face Rs1.78 per unit hike as Nepra reserves decision

ISLAMABAD: Electricity consumers across Pakistan, including Karachi, may face a Rs1.78 per unit increase after the power regulator concluded a hearing on January’s fuel cost adjustment and reserved its decision amid questions over furnace oil-based generation.

The hearing was held by the National Electric Power Regulatory Authority (NEPRA) on a petition filed by the Central Power Purchasing Agency (CPPA), which sought a Rs1.78 per unit increase under the monthly fuel price adjustment (FPA) for January.

During the proceedings, CPPA officials informed the authority that the reference fuel cost for January had been estimated at Rs10.39 per unit, but the actual fuel cost stood at Rs12.17 per unit, creating a gap that required recovery from consumers.

It was further disclosed that 8.76 billion units of electricity were sold during January.

According to CPPA officials, lower hydropower generation combined with higher electricity consumption led to greater reliance on expensive sources of generation, contributing to the higher fuel cost. They said furnace oil-based power plants were operated to meet peak demand and ensure uninterrupted supply.

However, NEPRA Member Punjab Amina Ahmed expressed concern over the rising trajectory of electricity prices. “Electricity prices are increasing. We had hoped for improvement, but things are moving in the opposite direction,” she remarked during the hearing, questioning why furnace oil plants were run in January.

She noted that monthly and quarterly adjustments had so far remained positive, despite expectations of improvement.

Responding to the concerns, CPPA officials maintained that increased peak demand necessitated the operation of furnace oil plants to meet system requirements.

NEPRA Member Maqsood Anwar observed that the requested increase was primarily driven by the use of furnace oil, which raises generation costs compared to other sources.

Industrial consumers also raised objections during the hearing, warning that frequent monthly fuel adjustments could dilute the impact of the prime minister’s industrial relief package. They argued that continuing adjustments could reduce the effective relief for industries from Rs4 per unit to around Rs2 per unit and urged NEPRA to safeguard consumer interests.

The CPPA’s petition applies nationwide, and under government policy guidelines, any decision taken by NEPRA will also apply to K-Electric consumers.

After concluding the hearing, NEPRA reserved its decision, which will be announced at a later date.