Power tariff may rise by Rs1.73 per unit under August fuel adjustment

Electricity consumers across Pakistan, including Karachi, may face higher bills after a fresh request for an upward fuel cost adjustment, coming close on the heels of a hike in petroleum prices.

The Central Power Purchasing Agency (CPPA) has formally applied for an increase under the monthly fuel charges adjustment for August. If approved, the price of electricity would rise by Rs1.73 per unit. The National Electric Power Regulatory Authority (NEPRA) will take up the application at a hearing scheduled for September 29.

The proposed increase is expected to apply to K-Electric consumers as well, extending its impact to Karachi's electricity users.

According to CPPA data, distribution companies were supplied 14.464 billion units of electricity during August, for Rs8.82 per unit.

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The generation mix showed hydel power contributing the largest share at 37.84 percent. Imported coal accounted for 15.59 percent and local coal 10.88 percent of total generation. Imported LNG made up 8.48 percent, local gas 7.04 percent, and furnace oil just 2.15 percent.

The cost figures underline why the cheaper sources dominate. Electricity generated from furnace oil cost Rs45.25 per unit, while power produced from imported LNG cost Rs45.92 per unit — several times the average cost of supply for the month.

Monthly fuel adjustments are passed on to consumers based on the difference between the reference fuel cost built into tariffs and the actual cost incurred. A decision is expected after the NEPRA hearing.