Power tariff may go up by 27 Paisa/Unit under March FCA

The National Electric Power Regulatory Authority (NEPRA) on Tuesday

completed public hearing to consider an increase in electricity price by up to Rs 0.27 per unit on account of fuel charges adjustment (FCA) for the month of March 2026.

Fuel Cost Adjustments are a routine but deeply consequential component of Pakistan's electricity pricing framework. They allow fluctuations in fuel prices and changes in the generation mix to be directly passed on to consumers — meaning every shift in how Pakistan generates its electricity eventually shows up on your monthly bill.

This month, the Central Power Purchasing Agency (CPPA-G) has sought a positive FCA of Rs 0.2660 per unit, citing an average electricity cost of Rs 8.26 per unit in March 2026 against a reference price of Rs 7.99 per unit — a gap of 27 paisa that consumers may now be asked to bridge.

During the NEPRA hearing, the Power Distribution Companies (DISCOs) came under fire over revenue-based electricity loads shedding as the power regulator said it was illegal and had no legal grounds.

However, the power division officials informed that removal of revenue based load shedding management could add over Rs 500 billion to circular debt.

It was also informed that the electricity demand had jumped 6.38 percent during the period under review. The Peak generation reached 18,551 MW in March. The number of protected consumers had also increased from around 11–12 million to 22 million.

It was further informed that hydel generation may reach 5,500 MW in May 2026 amid forecasts of heat wave.

The government had also procured Spot LNG at a cost of $23 per MMBTU which would result in per unit cost of Rs 42.

 It was also claimed during the public hearing that DISCOs losses had been slashed to 15.3 per cent compared to 15.7 per cent.

The bill recovered also witnessed improved to 99 per cent from 97 per cent. The DISCOs had faced a loss of Rs 221 billion during July –March 2025 which were cut to Rs 176 billion during the same period of 2026.

As of February 2026, Circular Debt stood at Rs. 1,837 billion, reflecting a temporary increase from June 2025 primarily due to timing differences. This position was improved in March 2026, where Circular Debt declined to Rs. 1,798 billion. It is also projected to reach zero net addition by year-end, in line with the Circular Debt Management Plan.

According to available data, country’s hydel power generation rose significantly by over 62 percent, reaching 2,105 GWh in March 2026 compared to 1,297 GWh in the same month last year. In contrast, electricity generation from RLNG-fired power plants dropped sharply by 67 percent to 504 GWh from 1,528 GWh in March 2025.

Hydel generation remained the largest contributor to the overall energy mix, accounting for 23.55 percent (2,105 GWh) of total electricity generation. Nuclear power followed with a share of 21.95 percent (1,962 GWh), generated at a cost of Rs2.7836 per unit.

Coal-based generation also maintained a notable share in the energy mix. Local coal contributed 1,498 GWh (16.76 percent) at a cost of Rs11.14 per unit, while imported coal accounted for 1,234 GWh (13.80 percent) at Rs15.2324 per unit.

Electricity generation from gas-fired plants stood at 1,014 GWh, making up 11.34 percent of total output, at a cost of Rs13.3470 per unit. In comparison, RLNG-based generation declined to 504 GWh, contributing 5.64 percent to the total generation, at a cost of Rs24.5559 per unit.

Power generation from residual fuel oil (RFO)-based plants remained limited at 90 GWh, with a high generation cost of Rs36.1606 per unit.

Renewable energy sources, including wind, solar, and bagasse, contributed a relatively small share to the overall generation mix.

No electricity was generated using high-speed diesel (HSD) during the month, indicating avoidance of high-cost fuel options. However, electricity imports from Iran, though limited in volume, were recorded at a cost of Rs32.0085 per unit.

Fuel cost adjustments are a routine component of Pakistan’s electricity tariff mechanism, allowing variations in fuel prices and the generation mix to be passed on to consumers.

According to CPPA-G, a total of 8,939 GWh of electricity was generated in March 2026 at a cumulative fuel cost of Rs72.214 billion, resulting in an average fuel cost of Rs8.0783 per unit.

After accounting for prior period adjustments, sales to independent power producers, and transmission losses, the net electricity delivered to distribution companies stood at 8,664 GWh at an average cost of Rs8.2612 per unit.

CPPA-G maintained that since the FCA for March 2026 stands at Rs8.2612 per unit against the reference fuel cost of Rs7.9952 per unit, a positive adjustment of Rs0.2660 per unit is justified.