ISLAMABAD: Consumers across Pakistan are bracing for another financial burden as electricity tariffs are projected to increase by Rs1.20 per unit. The proposed hike comes as power distribution companies (DISCOs) look to recover billions from consumers under monthly and quarterly fuel cost adjustments.
The Central Power Purchasing Agency (CPPA) has filed a formal petition with the National Electric Power Regulatory Authority (NEPRA) requesting the adjustment. If approved, the decision will pile fresh pressure on household and industrial budgets already strained by high inflation and rising operational costs.
The Mechanism Behind the Hike
The anticipated increase is primarily driven by fuel price variations during the recent billing cycle. According to the petition, the actual cost of generating electricity from sources like imported coal, liquefied natural gas (LNG), and furnace oil was higher than the baseline tariff initially set by the regulator.
Under Pakistan’s power sector framework, these fluctuations are routinely passed on to consumers via the Fuel Charges Adjustment (FCA) mechanism. Key operational highlights from the latest data include:
Generation Mix Imbalances: A lower-than-expected output from cheaper hydel sources forced reliance on expensive thermal power plants.
Capacity Payments Impact: Ongoing structural obligations and capacity payments to Independent Power Producers (IPPs) continue to elevate the baseline costs of the national grid.
Transmission Losses: High system losses and power theft in specific distribution circles have further widened the financial deficit of DISCOs.
Growing Pressure on Businesses and Households
The prospective tariff adjustment comes at a challenging time for domestic consumers, who are already adjusting to altered power brackets and high seasonal usage.
Industrial sectors have expressed immediate concern over the development, warning that a persistent rise in power costs directly reduces the competitiveness of Pakistani exports in the international market. Small and medium enterprises (SMEs) have also noted that rising utilities force them to cut overhead costs, potentially impacting employment rates.
Next Steps and NEPRA’s Public Hearing
Before the tariff hike can take official effect, NEPRA is legally mandated to hold a public hearing to scrutinize the CPPA’s data. The regulatory body will examine whether DISCOs followed the economic merit order in utilizing power plants and whether the requested recovery amount is fully justified.
The public hearing is scheduled to take place within the next two weeks at the NEPRA headquarters in Islamabad, where consumer rights advocates and industrial representatives are expected to contest the increase. If approved, the revised tariff will be reflected in consumer bills starting next month.
