Power Division projects Rs2.56 per unit increase in Nov bills, says bigger hike averted due to load management

The Power Division has projected a Rs2.56 increase per unit in November electricity bills due to fuel cost adjustments (FCA) from September, primarily driven by the use of expensive fuel for electricity generation. This adjustment could generate approximately Rs33 billion for the Power Division. However, targeted load shedding helped prevent a larger hike of around Rs5-6 per unit.

The statement highlighted that timely measures, including load management, limited the projected adjustment to the current Rs2.56 per unit, despite rising international fuel prices and LNG supply constraints. Targeted load management, operating for about two to two-and-a-half hours during September, helped reduce reliance on costly alternative fuels like furnace oil and high-speed diesel, saving consumers up to an additional Rs3.44 per unit.

The Power Division noted that importing re-gasified liquefied natural gas (RLNG) at domestic gas prices eased the burden on consumers by Rs0.83 per unit. Despite international fuel prices surging due to the Middle East conflict and the closure of the Strait of Hormuz, Pakistan continued sourcing RLNG through contracted supplies and spot cargoes as needed.

Over the January-August period, fuel price adjustments and quarterly tariff adjustments amounted to only a 65 paisa per unit increase, or a 1.9% rise in the base electricity tariff. The September FCA is expected to be Rs1.45 higher than August's Rs1.11 per unit, impacting consumers' electricity bills by an estimated Rs32.7 billion in November.

Industrial consumers are challenging the purported benefits of an industrial support package, claiming that the marginal cost rate of Rs22.96 per unit helps select industries while actual costs of Rs34 per unit contribute Rs11 per unit to the average consumer tariff, placing a burden on all consumers. The National Electric Power Regulatory Authority recently held a public hearing on the revision or suspension of this incremental package, with results pending.