Power consumers likely to face Rs12bn burden as NEPRA reviews 82 paisa/unit fuel cost hike

ISLAMABAD:Electricity consumers across Pakistan, including those served by K-Electric, could face higher power bills after the National Electric Power Regulatory Authority (NEPRA) concluded a public hearing on a proposal seeking an increase of 82 paisa per unit under the monthly Fuel Charges Adjustment (FCA) mechanism for May 2026.

The request was filed by the Central Power Purchasing Agency-Guaranteed (CPPA-G) on behalf of power distribution companies (DISCOs), citing higher fuel costs incurred during electricity generation in May.

If approved, the proposed adjustment is expected to impose an additional financial burden of nearly Rs12 billion on electricity consumers across the country, said industry sources.

According to CPPA-G's submission, a total of 12.638 billion units (12,638 GWh) of electricity were generated during May 2026. The average fuel cost of electricity stood at Rs9.25 per unit, compared with the reference fuel cost of Rs8.43 per unit, resulting in a requested increase of around 82 paisa per unit.

The generation mix showed that hydropower remained the largest source of electricity, accounting for 33.27 percent of total generation. Imported coal contributed 13.54 percent, followed by local coal at 11.66 percent, indigenous gas at 8.31 percent, while furnace oil accounted for only 0.16 percent of total electricity generation.

During the public hearing, NEPRA examined the data and submissions presented by CPPA-G as part of its regulatory review process.

Industry sources said the regulator will now scrutinize the supporting documents, generation data, fuel costs and other relevant information before issuing its final determination.

Under the federal government's uniform Fuel Charges Adjustment policy, any FCA approved by NEPRA for DISCO consumers also applies to K-Electric consumers, meaning the decision could affect electricity users across the country.

The Fuel Charges Adjustment mechanism allows changes in electricity tariffs to reflect fluctuations in fuel costs used for power generation. While increases result in higher electricity bills for consumers, lower fuel costs lead to negative adjustments that reduce monthly bills.

NEPRA is expected to announce its decision after completing the regulatory scrutiny of the submitted record and hearing proceedings.