Public sector distribution companies (Discos) have requested a Rs1.69 per unit fuel cost refund for consumers after power consumption fell by five per cent in July compared to last year. Improved hydropower conditions drove the reduction in fuel costs.
If NEPRA approves the refund, it could total around Rs23 billion and appear in August bills. The authority will hold a public hearing on August 28 to review the petition. The Economic Coordination Committee’s (ECC) recent decision also extends the fuel cost adjustment (FCA) refund to K-Electric consumers.
NEPRA is seeking public feedback on whether the Power Division should implement the ECC decision before formal cabinet approval. This feedback will guide how the FCA applies to K-Electric consumers and ensure uniform power tariffs nationwide.
The ECC directive requires NEPRA to apply the same tariff rationalisation to K-Electric consumers as Discos. NEPRA will adjust any difference between K-Electric’s FCA and the official rate through subsidies or cross-subsidies. The uniform FCA, effective from June 2025, will appear in August 2025 bills. NEPRA has already set a negative fuel adjustment of 78 paisa per unit for the current billing cycle.
The Central Power Purchasing Agency (CPPA) reported that July power consumption dropped 5pc from last year but rose 2.6pc from June 2025. Discos received 13,666 gigawatt hours (GWh) in July, up from 13,310 GWh in June but below 14,410 GWh in July 2024.
July Electricity Generation and Fuel Cost Analysis
The CPPA said the average fuel cost for electricity generation fell to Rs8.18 per unit in July from Rs9.04 per unit last year. The reference fuel cost had initially stood at Rs9.88 per unit. CPPA generated 14,123 GWh of electricity for Rs109.90 billion (Rs7.78 per unit). Discos received 13,666 GWh at Rs111.86 billion (Rs8.18 per unit).
Hydropower produced 40pc of total electricity in July, up from 36pc last year. Other contributors included RLNG at 17.3pc, local coal at 10.64pc, nuclear energy at 10pc, and imported coal at 8pc. Domestic natural gas contributed 7.74pc, and renewable sources added 4.8pc with no fuel cost. Iran supplied 0.25pc of electricity, costing Rs24.15 per unit.
RLNG-based generation cost the most at Rs22 per unit. Imported coal cost Rs14.49 per unit, local gas Rs13.38 per unit, and local coal Rs11.34 per unit. Furnace oil contributed less than 1pc at Rs31 per unit. Nuclear energy cost Rs2.42 per unit, up from Rs1.48 last year.
NEPRA reviews the FCA monthly and adjusts consumer bills accordingly. This mechanism ensures that changes in fuel costs directly affect bills. Quarterly tariff adjustments account for variations in power purchase prices, capacity charges, and transmission and distribution losses included in the base tariff set by the federal government.