Islamabad – Pakistan’s electricity distribution companies have asked the regulator to approve a refund of Rs1.69 per unit for July, citing cheaper generation costs. If cleared, the adjustment would hand back about Rs23 billion to consumers through their August bills.
The request stems from a 5% drop in electricity demand compared with July last year and improved hydropower generation, which lowered the overall fuel cost.
Public Hearing Scheduled
The National Electric Power Regulatory Authority (Nepra) will hold a public hearing on August 28 to decide the matter. The refund falls under the routine monthly fuel cost adjustment (FCA) mechanism, which aligns consumer bills with the actual cost of producing electricity.
The relief will extend to K-Electric customers as well, following a recent decision by the Economic Coordination Committee (ECC) to enforce a uniform FCA across the country. Nepra has also sought feedback on whether this decision should take effect even before the federal cabinet formally signs off on it.
What the Numbers Show
According to the Central Power Purchasing Agency (CPPA), Pakistan generated 14,123 gigawatt hours (GWh) of electricity in July at an average cost of Rs7.78 per unit. About 13,666 GWh was supplied to the Discos, with the cost to consumers working out to Rs8.18 per unit. That is not only cheaper than last July’s Rs9.04 per unit but also well below the reference tariff of Rs9.88 per unit.
Electricity demand, while lower than July 2024’s 14,410 GWh, was still 2.6% higher than June 2025, reflecting seasonal variation.
Hydropower Leads, Expensive Fuels Shrink
Hydropower accounted for 40% of generation in July, up from 36% last year, significantly reducing reliance on costly imported fuels. Other key contributors were:
- RLNG: 17.3% share, at a steep cost of Rs22 per unit
- Local coal: 10.6%, at Rs11.34 per unit
- Nuclear: 10%, at just Rs2.42 per unit
- Imported coal: 8%, at Rs14.49 per unit
- Natural gas (domestic): 7.7%, at Rs13.38 per unit
Wind and solar added nearly 5% of supply at zero fuel cost, while furnace oil and Iranian imports—both among the priciest options—contributed less than 2% combined.
Why It Matters
Monthly FCAs are a double-edged sword for consumers. They pass on spikes in global fuel costs directly into bills but also deliver refunds when cheaper generation sources dominate, as seen in July. However, analysts point out that sustained relief depends on expanding reliance on cheaper domestic sources like hydropower, nuclear, and renewables—while limiting exposure to imported RLNG and coal, which continue to burden the system with volatility and high prices.
