ISLAMABAD: Pakistan’s Power Division has estimated a Rs2.56 per unit increase in electricity bills in November under the September fuel cost adjustment (FCA), saying targeted load management and other measures helped shield consumers from a potentially larger increase.
The proposed adjustment is expected to generate around Rs32.7 billion in revenue, according to a statement issued by the Power Division on Thursday.
Officials said the increase could have been significantly higher amid rising international fuel prices and difficulties in liquefied natural gas (LNG) supplies. However, targeted load management and other interventions helped contain the additional burden on consumers.
Targeted load management limits tariff increase
According to the Power Division, the additional fuel cost adjustment could have reached Rs3.44 per unit without these measures. Targeted load management during September helped reduce reliance on expensive alternative fuels, including furnace oil and high-speed diesel, thereby limiting the expected increase.
Authorities implemented targeted load management for around two to two-and-a-half hours during the month, the statement said.
Moreover, supplying imported re-gasified liquefied natural gas (RLNG) at domestic gas prices reduced the burden on consumers by 83 paisa per unit.
The Power Division said these interventions helped protect consumers from a larger increase at a time when international fuel markets and supply chains faced mounting pressure.
Global fuel crisis disrupts supplies
The statement attributed the pressure on fuel supplies and international prices to the conflict in the Middle East and the closure of the Strait of Hormuz, which disrupted supply chains and drove up global fuel costs.
Despite Qatar’s declaration of force majeure, Pakistan continued efforts to meet its RLNG requirements through contracted supplies and additional spot cargoes, the Power Division said.
The ministry also highlighted the relatively limited impact of fuel price and quarterly tariff adjustments during the first eight months of the year.
According to the statement, the combined impact of these adjustments from January to August remained at 65 paisa per unit, equivalent to an increase of just 1.9% over the base electricity tariff.
The Power Division attributed this outcome to tariff rationalisation measures and an incremental electricity consumption package designed to encourage additional power use by industrial and agricultural consumers.
September adjustment carries Rs32.7 billion impact
The September fuel cost adjustment is expected to be Rs1.45 per unit higher than the August adjustment of Rs1.11 per unit, bringing the estimated financial impact on consumers’ November bills to Rs32.7 billion.
The Power Division said it was continuing to monitor international fuel markets and supply chains to minimise the impact of external price shocks on domestic electricity consumers.
However, the industrial support package for incremental electricity consumption has faced criticism from industrial consumers, who question whether its benefits are being distributed fairly.
Industry representatives argue that the marginal cost rate of Rs22.96 per unit benefits only a limited number of consumers, while the actual marginal cost of around Rs34 per unit places an additional burden of Rs11 per unit on average consumers through electricity tariffs.
Meanwhile, the National Electric Power Regulatory Authority (NEPRA) held a public hearing last week on a possible revision or suspension of the incremental consumption package.
The regulator has yet to announce its decision.
