Govt Proposes Rs25B Fuel Cost Increase for Electricity Users

ISLAMABAD:
The Pakistani government is set to impose an additional Rs25 billion charge on electricity consumers for fuel costs in their October bills, as announced by the National Electric Power Regulatory Authority (Nepra) during a public hearing on Tuesday.

During the session, Nepra members Maqsood Anwar Khan, Amina Ahmed, and Ghulamullah Shaikh listened to Central Power Purchasing Agency (CPPA) CEO Rehan Akhtar, who attributed the Rs1.73 per unit increase in fuel costs for August to high prices of re-gasified liquefied natural gas (RLNG) and coal imports, coupled with a shortfall in cheaper hydropower and nuclear energy generation.

Hydropower generation, initially projected to contribute 41% to the total energy mix, fell short at 38%, while nuclear power’s share dropped to 10% from an expected 16.4% due to outages at the Karachi nuclear facility. Consequently, the reliance on imported coal surged to 15.6%, significantly higher than the planned 7.4%. This shift has raised the average nuclear fuel cost to Rs3.15 per unit, up from Rs2.5, while hydropower remains cost-free.

As the government seeks to balance energy costs amid rising fuel prices, consumers are likely to feel the financial strain. The proposed tariff adjustments could lead to increased electricity bills, impacting household budgets and economic stability. Nepra’s review of the incremental tariff package for industries, introduced last December, will be crucial in determining future pricing strategies. Stakeholders await further announcements regarding upcoming meetings and potential regulatory changes.