Power tariff likely to rise by Rs1.72/unit under April FCA

ISLAMABAD:Electricity prices are likely to increase by Rs1.7251 per unit under the April 2026 fuel charges adjustment (FCA), as the National Electric Power Regulatory Authority (NEPRA) has scheduled a public hearing to consider the requested adjustment on June 2, 2026.

The proposed adjustment, if approved, will be passed on to consumers under the monthly FCA mechanism, adding further pressure on electricity users already facing persistent tariff increases.

According to data submitted before the National Electric Power Regulatory Authority, the expected increase is driven by a costly electricity generation mix, where dependence on expensive thermal fuels and imported energy continues to push up overall power generation costs despite the presence of cheaper domestic sources.

The generation mix for April 2026 shows that total electricity generation stood at 9,499 GWh, while 9,295 GWh was delivered to distribution companies.

Nuclear energy and hydel power contributed the largest shares in the generation basket, with nuclear providing more than one-fifth of total electricity at a relatively low cost and hydel also supplying a significant portion from domestic water resources.

However, this lower-cost base is offset by continued reliance on thermal generation. Coal-based power, including both local and imported coal, remains a major contributor, with imported coal significantly increasing costs due to global price fluctuations and exchange rate pressures.

Gas and RLNG-based generation further add to the overall cost burden due to import dependence and volatile international prices. Among the most expensive sources, residual fuel oil and high-speed diesel contribute smaller shares but sharply increase the average per-unit cost of electricity.

Imported electricity from Iran also forms part of the generation mix, adding to the overall cost profile and highlighting external supply dependence.

On the lower-cost side, renewable energy sources such as wind and solar continue to supply electricity at zero fuel cost, while bagasse-based generation also contributes from biomass resources. However, their share remains insufficient to offset the impact of expensive thermal and imported fuels.

The calculated fuel cost for April 2026 stood at Rs9.4233 per unit, while the delivered cost after system losses and adjustments reached Rs9.9748 per unit.

The Central Power Purchasing Agency Guarantee (CPPA-G) on behalf of DISCOs has requested the upward revision in fuel charges, arguing that the generation mix and international fuel price volatility justify the increase, which would be passed on to consumers under the FCA mechanism.

If approved, the increase will apply uniformly across all ex-WAPDA Distribution Companies (DISCOs) as well as K-Electric under the uniform tariff policy, further increasing concerns over rising electricity costs for consumers.

The regulator will conduct a public hearing on June 2, 2026 to review the proposed adjustment before issuing a final decision regarding the FCA for the month of April 2026.