Power companies seek Rs1.20 per unit fuel cost adjustment for August

ISLAMABAD: Power companies on Friday sought a Rs1.20 per unit increase in fuel cost charges for consumers across the country in August, primarily due to the use of expensive imported fuels.

The request comes despite around 75pc of electricity generated in June having come from cheaper domestic sources, predominantly those with zero fuel costs.

Once approved, the power companies would charge consumers of all power utilities, including ex-Wapda Distribution Companies (Discos) and K-Electric, an additional Rs15.7 billion through August bills. The National Electric Power Regulatory Authority (Nepra) has called a public hearing on July 29 to examine the request for a fuel cost adjustment (FCA).

The Central Power Purchasing Agency (CPPA), which filed the petition seeking a higher FCA for June, said power consumption was slightly lower than in June 2025. It reported electricity consumption of 13,066 million units in June this year, compared to 13,310 million units in the same month last year.

The increase in fuel costs was primarily driven by the nearly doubled price of Regasified Liquefied Natural Gas (RLNG), which resulted in a fuel cost of Rs35 per unit, compared to Rs16 per unit in June last year.

The CPPA said the reference fuel cost for June 2026 had been set at Rs7.714 per unit, but the actual fuel cost stood at Rs8.90 per unit, necessitating an additional charge of Rs1.20 per unit to be recovered from consumers through the upcoming monthly bills.

Another reason for the higher fuel costs was the utilisation of furnace oil-based plants at Rs52 per unit and diesel at about Rs57 per unit. The combined contribution of these two fuels was less than 1pc of the overall grid supply.

This was despite the fact that 39pc of the power supply came from hydropower, followed by 10pc from local coal, 6.5pc from local gas and 13.5pc from nuclear power. Wind projects contributed 5pc to the supply, solar 0.82pc and bagasse-based generation 0.35pc.

The fuel cost of local coal-based generation came to Rs11.5 per unit, compared to Rs16.65 per unit for imported coal. Generation based on local gas cost Rs13.7 per unit, compared to Rs35.5 per unit for imported Regasified Liquefied Natural Gas (RLNG). Nuclear power’s fuel cost was reported at Rs2.85 per unit.

Earlier this month, the Oil and Gas Regulatory Authority (Ogra) notified an increase of around 15pc in the price of RLNG for sales at the distribution stage by the two Sui gas companies for the current month. This was mainly due to purchases from the international spot market at short notice amid supply disruptions caused by the US-Iran war. ...