Pakistan Raises Electricity Fuel Charge as Industrial Relief Package Faces Split Decision

November bills bring a fuel charge and a disputed package revision

Pakistan's electricity consumers face an additional fuel charge of Rs2.3673 per unit for September 2026, payable through November bills, while industrial and agricultural users face a separate increase in the price of electricity consumed under a special incentive package.

The National Electric Power Regulatory Authority (NEPRA) approved the fuel adjustment below the Rs2.5624 per unit requested by the Central Power Purchasing Agency Guaranteed (CPPA-G). The adjustment is expected to recover approximately Rs25 billion and applies to eligible customers of K-Electric and the distribution companies formerly associated with WAPDA.

Separately, NEPRA raised the rate under the Incremental Consumption Package from Rs22.98 to Rs25.30 per unit, an increase of Rs2.32, or about 10.1%. That decision followed a 2-2 split, resolved by Chairman Waseem Mukhtar's casting vote. Two members urged suspension of the package until reliable cost information became available.

The Power Division says the package revision changes the price of qualifying additional consumption rather than the regular industrial tariff. Factories and farms using the package will nevertheless pay more for those additional units, while the September fuel adjustment also applies to electricity covered by the scheme.

For households, the immediate issue is the fuel charge calculated from September consumption. For businesses, the decisions create two separate costs: a charge linked to past fuel expenses and a higher provisional price for additional electricity under the package.

How much will consumers pay?

NEPRA's approved fuel charge is Rs2.3673 for each eligible unit billed in September. A unit means one kilowatt-hour, the amount of electricity used by an appliance drawing one kilowatt continuously for an hour.

The calculation uses September's billed units, even though the charge appears later. A customer billed for 300 units in September would face an additional Rs710.19 before any applicable tax. At 500 units, the charge would be Rs1,183.65.

Distribution companies must show the adjustment separately on bills. If a November bill was issued before notification of the decision, the charge may be collected in the following month. Some customers could therefore see the September adjustment in December instead.

Three groups are exempt: lifeline consumers, electric vehicle charging stations, and consumers who have opted for a prepaid electricity tariff. Other eligible households, shops, factories and farms face the same national adjustment, including customers served by K-Electric.

The approved rate is below CPPA-G's request by Rs0.1951 per unit. For a customer with 300 eligible units, that reduction amounts to Rs58.53 before tax compared with the requested charge.

Why September's electricity became more expensive

CPPA-G sought the adjustment because actual fuel expenses exceeded the fuel allowance already included in electricity tariffs. NEPRA put the approved September fuel cost at Rs9.8268 per unit against a reference allowance of Rs7.4596. The difference produces the Rs2.3673 adjustment.

Pakistan generated 13.22 billion units during September, about 0.98% above the amount assumed in the reference plan. The larger change was in the types of power plants supplying that electricity.

Imported coal generation reached 2.16 billion units against an assumed 1.14 billion units, almost twice the planned amount. Its fuel cost also rose from the reference Rs11.78 per unit to Rs17.23.

Hydropower generation fell from an assumed 5.05 billion units to 4.83 billion, while nuclear generation dropped from 2.11 billion to 1.89 billion. Local coal generation also fell, from 1.48 billion units to 1.33 billion.

Diesel plants supplied about 0.21 billion units against a plan that assumed none. Their fuel cost was Rs62.14 per unit, compared with Rs5.99 for local coal generation. Furnace oil generation cost Rs44.86 per unit. Those figures concern fuel expenses rather than the complete price charged to consumers.

CPPA-G said the system operator selected plants according to the Economic Merit Order, subject to operational constraints and system requirements. That order generally gives priority to cheaper available generation, while allowing for limits on what the grid and individual plants can deliver.

What NEPRA changed before approving the charge

NEPRA reduced some plant fuel claims after checking them against approved rates and limited the transmission losses included in the calculation. Electricity lost during transmission matters because the cost of generating it can increase the cost of the electricity that reaches customers.

The regulator applied an approved loss ceiling of 2.50% for the network operating at 500 and 220 kilovolts, and 4.3% for the PMLTC high voltage direct current line. National Grid Company had reported 427.921 gigawatt-hours of transmission and transformation losses, including 51.894 gigawatt-hours associated with that line.

NEPRA also provisionally accepted a Rs10.617 billion reduction connected with domestic gas supplied to plants that normally use imported liquefied natural gas. The arrangement allowed qualifying domestic gas supplied from April 1 to October 31, 2026, to be charged at Rs2,000 per million British thermal units.

CPPA-G had not provided all the required details for individual plants. NEPRA allowed the larger reduction because it gave consumers more relief, while requiring supporting calculations with the agency's next monthly fuel adjustment petition.

September procurement also included 170.389 gigawatt-hours from net metering and net billing customers, and about 12.795 gigawatt-hours through bilateral arrangements with small and captive power producers. Distribution companies were directed to reconcile these purchases and provide complete energy and cost records for future calculations.

Which industrial and agricultural units cost Rs25.30?

The Rs25.30 rate applies to qualifying additional electricity consumption under the Incremental Consumption Package. The scheme prices electricity used above a previous consumption benchmark differently from ordinary consumption, which continues under existing tariffs.

Prime Minister Shehbaz Sharif announced the Roshan Economy Power Package in October 2025, with a stated operating period from November 2025 to October 2028. Its purpose was to encourage factories and farms to use more grid electricity, supporting production, exports and employment.

A business with 1,000 qualifying additional units would pay Rs25,300 for those units at the revised package rate, compared with Rs22,980 previously. The difference is Rs2,320 before other applicable bill components.

The Power Division spokesperson explained the scope of the change:

Rs25.30 per unit is the revised marginal rate under the incremental consumption package for industrial and agricultural consumers. It is not the industrial tariff.

Marginal cost means the cost of supplying extra electricity. The Power Division attributed the revision to higher marginal generation costs amid the war situation in the Persian Gulf and described the new rate as temporary.

The package rate applies from the November 2026 billing month on an interim basis, pending a comprehensive review. The decision was forwarded to the federal government for notification. Bills issued before notification can be adjusted in subsequent months.

Why two members wanted the package suspended

NEPRA's tariff member Amina Ahmed and development member Maqsood Anwar opposed the proposed Rs25.30 rate because they considered its supporting information inadequate. They said the regulator's institutional calculations put the marginal supply cost at Rs31.83 per unit.

Their central concern was the Rs6.53 gap between that calculated cost and the revised package price. They recommended temporarily suspending the scheme until verified information could support a decision on whether to retain, revise or end it.

The dissenting members warned that a package priced below the cost of supplying additional electricity could increase charges elsewhere. They identified two routes: higher average fuel costs recovered through monthly adjustments, and larger quarterly adjustments for customers outside the package because incremental units are excluded from those quarterly calculations.

Chairman Waseem Mukhtar acknowledged that their conclusions deserved attention. In explaining his position, he said the dissenting members' conclusions:

"need serious consideration".

Mukhtar nevertheless opposed suspending the scheme at that stage. He supported giving the Ministry of Energy another opportunity to submit the required information and used his casting vote to approve the provisional Rs25.30 rate.

Missing cost information puts the scheme under review

All four members criticised the Power Division and its subordinate organisations for failing to provide complete information despite repeated reminders. The first review, due after the package's initial six months and expected in June, remained outstanding.

NEPRA identified the Independent System and Market Operator and the Power Planning and Monitoring Company as organisations that had failed to provide the marginal price in the required form. That information is needed to work out the cost of supplying additional electricity and whether the package price covers it.

The Power Division must submit the outstanding assessment for the first review period and a complete assessment for the second period, covering June to November 2026. NEPRA will then determine the appropriate rate and the future of the package using validated data.

The determination sets submission deadlines, although the exact dates were not disclosed in the public descriptions of the decision. NEPRA warned that failure to comply could lead to suspension or termination of the scheme and legal proceedings against entities withholding required information.

The review must also consider each period separately. The decision preserves the requirement concerning termination when upward tariff adjustments are needed in two consecutive reviews, making the pending assessments important to the package's continued operation.

How much relief has reached consumers?

The Power Division says the scheme covered 6,940 gigawatt-hours of additional consumption between December 2025 and September 2026 and delivered an estimated Rs43.5 billion in benefits. That electricity volume equals 6.94 billion ordinary billing units.

Dividing the stated benefit by that volume gives an average benefit of about Rs6.27 per additional unit across the package. The calculation helps explain the scale of the government's claim, while individual savings depend on the consumer's tariff and qualifying usage.

Industrial consumers received benefits of Rs5 to Rs10 for each additional unit, according to the division. Spread across their full electricity consumption, those benefits reduced bills by an average of Rs1.5 to Rs2.5 per unit. The smaller figure reflects the fact that the discount covers only qualifying additional consumption.

Of 518,316 eligible consumers, 209,335 had benefited, a participation share of about 40.4%. That leaves 308,981 eligible consumers outside the reported beneficiary total.

The division also said the industrial tariff, including taxes, was approximately Rs18.94 per unit lower than in March 2024. It put the average industrial rate for October 2026 at Rs34.40 per kilowatt-hour. Accounts of that statement describe the Rs34.40 figure as both including and excluding taxes, leaving its tax basis unclear.

The government's stated aim is to keep the cost of package relief from being passed to other consumers. The dissenting members' demand for verified marginal costs concerns whether the revised price can achieve that aim.

The dates behind the November changes

The fuel adjustment and package review developed on separate tracks. The fuel charge concerns electricity already consumed in September, while the revised package rate applies from the November billing month.

• October 2025: Shehbaz Sharif announced the Roshan Economy Power Package.
• November 2025: The package's stated operating period began, running through October 2028.
• December 2025 to September 2026: The Power Division's benefit figures cover 6,940 gigawatt-hours of additional consumption.
• June 2026: The package's first review was due.
• October 15, 2026: CPPA-G filed its September fuel adjustment request.
• October 29, 2026: NEPRA held a public hearing on that request.
• November 6, 2026: NEPRA issued fuel adjustment notification S.R.O. 2094(I)/2026.
• November 2026 billing month: The fuel adjustment and provisional Rs25.30 package rate apply, with later adjustments possible for bills already issued.

The next steps are CPPA-G's supporting gas cost calculations with its next monthly petition, and the Power Division's comprehensive package review, including the assessment covering June to November. Those submissions will inform future charges and the decision on whether the incentive scheme continues.

Key Points

• NEPRA approved a September fuel adjustment of Rs2.3673 per unit for November bills.
• The charge uses September billed units. At 300 eligible units, it adds Rs710.19 before tax.
• Lifeline consumers, electric vehicle charging stations and qualifying prepaid customers are exempt.
• The additional consumption package rate rises from Rs22.98 to Rs25.30 per unit, about 10.1%.
• Two NEPRA members sought suspension of the package because verified cost information was missing.
• The Power Division says the scheme delivered Rs43.5 billion in benefits to 209,335 consumers.
• The revised package rate remains provisional pending a comprehensive review.