Electricity prices in Pakistan may increase by up to Rs1 per unit from July 1, due to a recent hike in gas tariffs used for power generation. The Central Power Purchasing Agency (CPPA-G) warned of this possibility during a public hearing held by NEPRA on Monday. The immediate request, however, was a smaller 10 paisa per unit hike for May 2025 under the Monthly Fuel Charges Adjustment (FCA) mechanism.
NEPRA has not yet approved the increase but reserved its decision for later. If granted, the 10 paisa hike alone would add Rs1.25 billion in extra burden to consumers for May. CPPA-G warned that future bills may reflect even higher charges, driven by expensive fuel inputs—particularly gas used by power plants.
During May, Pakistan generated 12,755 GWh of electricity at a total fuel cost of Rs99.15 billion, translating into an average cost of Rs7.77 per unit. The power sent to distribution companies (DISCOs) after accounting for transmission losses cost Rs92.67 billion. The largest share came from hydropower (38%), followed by RLNG (17%), nuclear (16%), and coal and gas-based sources. Solar and wind made up a very small share.
The CPPA also highlighted the serious impact of circular debt, revealing that consumers are already paying Rs3.23 per unit in surcharges just to cover interest on this debt. This surcharge alone results in Rs323 billion being collected annually. If bill recovery remains weak, officials warned that more surcharges may be introduced to stabilize the sector financially.
NEPRA acknowledged that rising fuel prices and poor governance of DISCOs are pushing power costs higher. Officials called for long-term reforms, improved billing and recovery systems, and better energy planning to control prices. Without changes, they warned, consumers will continue to face frequent and painful tariff hikes.