Electricity bills may rise by Rs2.56 per unit in November, says Power Division
Expected increase in November bills
The Power Division has projected an increase of Rs2.56 per unit in electricity bills for November under the September fuel price adjustment (FPA). It said the increase is linked to the use of expensive fuels for power generation.
The adjustment is expected to add around Rs32.7 billion to consumers’ electricity bills. The Power Division said the increase could have been much higher without measures taken to manage electricity demand.
Load management helped limit the increase
The Power Division said targeted load management during September helped prevent a possible increase of Rs5 to Rs6 per unit. According to its statement, these measures limited the expected adjustment to Rs2.56 per unit despite rising international fuel prices and restrictions on liquefied natural gas (LNG) supplies.
“The Ministry of Energy (Power Division) has averted a potential Rs5-6 per unit hike in the September fuel price adjustment (FPA) through timely measures, including targeted load management, limiting the projected adjustment to Rs2.56 per unit despite rising international fuel prices and constraints on LNG supplies,” the statement said.
The division said electricity demand was managed for around two to two-and-a-half hours during September. This reduced the need to use costly alternative fuels, including furnace oil and high-speed diesel, and helped avoid an additional burden of up to Rs3.44 per unit.
LNG supplies and global fuel prices
The Power Division said supplying imported re-gasified liquefied natural gas (RLNG) to power plants at domestic gas prices reduced the burden on consumers by 83 paisa per unit. However, international fuel prices have risen sharply amid the Middle East conflict and disruptions to supply routes following the closure of the Strait of Hormuz.
Despite Qatar’s declaration of force majeure, Pakistan continued efforts to secure the RLNG needed for power generation through available contracted supplies and additional spot cargoes when necessary. These efforts aim to maintain fuel supplies and limit the effect of higher global prices on electricity costs.
Impact on consumers and future bills
According to the Power Division, the September fuel price adjustment is expected to be Rs1.45 per unit higher than August’s adjustment of Rs1.11 per unit. The estimated financial impact on consumers’ November bills is around Rs32.7 billion.
The division also said the combined impact of fuel price and quarterly tariff adjustments from January to August was limited to 65 paisa per unit, or a 1.9 per cent increase over the base electricity tariff. It credited tariff rationalisation and a special electricity consumption package for industrial and agricultural users with encouraging greater use of electricity from the national grid.
The expected increase shows how strongly electricity costs are affected by international fuel prices and supply problems. Although load management and LNG arrangements helped limit the projected hike, consumers may still face higher bills in November.
The final impact will depend on the applicable adjustment and official billing arrangements. The Power Division says it will continue monitoring fuel markets and supply chains to reduce the effect of further price shocks.
Also read: Electricity bills may rise again as NEPRA reviews Rs2.52 per unit hike
