Electricity users across Pakistan may get some relief in their upcoming bills as power companies have proposed a fuel cost refund of Rs. 1.69 per unit for September.
The Central Power Purchasing Agency (CPPA) submitted the proposal to the National Electric Power Regulatory Authority (Nepra), which will hold a public hearing on August 28 before approving the adjustment. The refund falls under the monthly Fuel Charges Adjustment (FCA) system, a mechanism that allows consumer bills to be revised based on fluctuations in actual fuel costs.
Why Bills Are Coming Down
In July, total electricity generation stood at 14,123 gigawatt-hours (GWh) with an average cost of Rs. 7.78 per unit. Once transmission losses and other adjustments were factored in, the delivered cost to distribution companies (Discos) worked out to Rs. 8.18 per unit.
This lower-than-expected fuel cost is the reason behind the proposed per-unit refund. For cash-strapped households, even modest reductions in electricity tariffs can bring short-term relief, especially given the broader inflationary environment.
What Powered Pakistan in July
July’s generation mix leaned heavily on cheaper hydropower, which supplied 40% of the total electricity—over 5,600 GWh. Nuclear plants also played a critical role, producing 1,405 GWh at just Rs. 2.42 per unit, one of the lowest-cost sources in the country.
On the higher end of the spectrum, imported fuels dragged up costs. RLNG made up 17% of total generation, but at a steep Rs. 22.03 per unit. Local coal provided 10.6%, while imported coal added another 8%, both at significantly higher costs compared to hydropower and nuclear.
Notably, no electricity was generated from diesel in July, while furnace oil contributed only 108 GWh at a prohibitively expensive Rs. 31 per unit. Renewable energy sources chipped in modestly, with wind and solar supplying 592 GWh and 105 GWh, respectively.
Policy Shift: Uniform Tariffs Across the Country
The Energy Ministry has directed Nepra to apply a nationwide uniform FCA policy, ensuring that consumers of both state-run distribution companies and Karachi’s K-Electric face the same adjustments. Any cost difference for K-Electric will be covered through government subsidies or cross-subsidies.
This uniform system, approved by the Economic Coordination Committee (ECC) earlier this month, has been in effect since June and is being reflected in consumer bills starting August.
The Bottom Line
If Nepra approves the CPPA’s request, electricity consumers will see a refund adjustment in their September 2025 bills, offering some welcome relief at a time when affordability of power remains a pressing concern.
