ISLAMABAD: A new Nepra fuel price hike of Rs1.20 per unit will be imposed in the bills of the consumers in Pakistan for the month of August despite the fact that there has been a reduction of more than three percent in power demand. The government has announced that it will introduce a new power tariff package that will help to recover Rs15.7 billion for June electricity consumption.

During a public hearing in Islamabad, the National Electric Power Regulatory Authority (Nepra) not only questioned the performance of power sector organizations but also criticized the policy of excess load shedding, despite falling electricity consumption in almost all categories of consumers. The regulatory body not only reviewed the persisting system problems that were hindering the utilization of lower cost available generation but also brought into attention three nuclear plants outages.

Reports from government delegates, including the power division’s and other organizations’ representatives, indicated that electricity usage was estimated to be 5 percent lower than expected in June and 3.3 percent lower than the same month in the previous year. The total number of units utilized in June this year amounted to 9.995 billion units as against 10.337 billion units recorded in the same month of the previous year.

It is interesting to note that, with the exception of 2.8 percent increase in industry’s consumption, reduction in electricity usage was observed across all sectors, varying between 3.5 and 5 percent in domestic and commercial sectors and 12 to 29 percent in agriculture and bulk consumers.

One of the justifications for the Nepra increase in the price of fuel is because of the problems faced in the provision of fuel. The officials stated that the non-availability of Qatar's LNG caused them to buy fuel from the spot market in addition to using furnace oil.

Concerns about public demonstrations due to the issue of excess load shedding were raised by Nepra’s member development, Maqsood Anwar Khan, despite the fact that power companies showed reduced demand from their customers. Load shedding has been carried out for four consecutive days in June, which varied from 93MW to 730MW with commercial load shedding being on the high end.

ALSO READ: Nepra Approves 269MW Hybrid Renewable Project at Dhabeji

Some of the reasons for the decrease in demand include the rise of solar net metering in use, moving of the Balochistan tube wells to solar energy usage, weather seasons, and other causes. Naveed Qaiser, an official in the power division, mentioned that the solar switching from day to night is now one of the major causes of demand fluctuations.

As per Qaiser, the government was working on designing a new package for electricity tariff which will take care of time-of-use tariff, captive power plants and battery energy storage system. According to him, the consumer use of battery energy storage system will be a positive for both grid and tariff design; however, the installation of such system at the utility level may increase the tariff a little bit. He did not reveal any other detail about the package as it was at a preliminary stage.

The delegation from Karachi industrialists recommended an analysis of the ongoing incremental tariff package since it was having some effects on other consumer segments, including domestic consumers as well. Qaiser remarked that the incremental tariff package had been equally beneficial for all industrial sectors, but he did admit that the three years incentive package had been going on for six months.

According to government delegates, Disco inefficiency cost was reduced from Rs591 billion to Rs326 billion in two years due to 1 percent decrease in system losses. But Nepra member Maqsood Anwar raised objection over how this improvement has been made, as it has been done due to load shedding and closing of grid stations and transformers rather than governance measures or tackling illegal connections. "Improvement is made only when there are some people out in the field and take away kundas and stop the thefts and not due to closing down of machines while people are suffering in hot weather conditions."

The issues of industrial consumers escalated further after government representatives revealed that three nuclear plants, one located in Karachi and the other two in Chashma, had been facing issues regarding their reactors. But on the other hand, both the representatives of Nepra and the government stated that there was 94 percent availability of all nuclear plants, which meant that their non-availability was still within 8 percent.

The other complaint of industrial consumers regarding power generation companies was about positive fuel cost adjustment due to unexpected technical breakdowns, reliance on expensive furnace oil and RLNG, and lack of availability of cheaper hydropower. According to a spokesperson of the power department Rihan Akhtar, the net positive fuel cost adjustment would be 86 paise per unit because of the expiry of 34 paise per unit existing FCA, which would be substituted by the new fuel cost adjustment of Rs1.20 per unit in August.

Nepra Fuel Cost Adjustment and Actual Fuel Costs Diverge

The reference cost of fuel in June 2026 was Rs7.714 per unit as stated by the Central Power Purchasing Agency; however, the actual cost of the fuel was higher at Rs8.9 per unit. The disparity in the cost of fuel that has been planned against the actual cost of fuel that has been paid is the reason why there has been an extra charge of Rs1.20 per unit on the consumer bill.