Increase In Electricity Prices for July 2025

Staff Report

ISLAMABAD: Electricity consumers may face an increase of up to Rs 1 per unit in electricity tariff from July 1, following the recent hike in gas tariffs for the power sector.

This warning came from the Central Power Purchasing Agency (CPPA-G) on Monday during National Electric Power Regulatory Authority (NEPRA) public hearing which was held under NEPRA chairman Waseem Mukhtar on the Monthly Fuel Charges Adjustment (FCA) for the month of May 2025.cheaper electricity prices

Earlier, the CPPA had submitted a request for a 10 paisa per unit increase under FCA for the power distribution companies (DISCOs). NEPRA concluded the hearing and reserved its decision, pending further scrutiny of data.

According to sources, if the 10 paisa increase is approved, it will be applicable for one month only and is expected to impose an additional burden of Rs 1.25 billion on electricity consumers of the DISCOs. The reference fuel cost for May was reported at Rs 7.39 per unit, compared to Rs 7.49 in April.

CPPA officials, responding to questions during the hearing, highlighted that the recent increase in gas tariffs for power generation would likely push electricity tariffs up by Rs 1 per unit. They further cautioned that if electricity bill recoveries do not improve, the government may be forced to raise surcharges in the future to manage the growing circular debt.

Currently, consumers are already paying a surcharge of Rs 3.23 per unit solely to cover the interest payments on circular debt. In total, power consumers contribute Rs 323 billion annually just to service the interest on this debt, CPPA representatives revealed.

NEPRA stated that it will make a final decision on the 10 paisa per unit adjustment after thoroughly reviewing the data submitted by CPPA.

According to the data submitted by CPPA-G, the actual fuel cost for electricity generation in May 2025 came out to Rs 7.4940 per kWh, compared to the reference fuel cost of Rs 7.3925 per kWh, resulting in a difference of Rs 0.1015 per unit.

CPPA-G submitted that a total of 12,755 GWh of electricity was generated in May, at a cost of Rs 99.153 billion, reflecting an average fuel cost of Rs 7.7739/kWh. After accounting for transmission losses of 355 GWh (2.78%) and other adjustments, a total of 12,367 GWh was delivered to DISCOs at a net cost of Rs 92.676 billion or Rs 7.4940/kWh.

Hydel sources contributed the highest share of power generation at 37.98% (4,844 GWh), followed by RLNG at 16.99% (2,168 GWh), and nuclear at 15.77% (2,012 GWh). Local coal-based generation accounted for 11.08% of the mix, while imported coal stood at 6.24%. Other significant contributors included gas (6.92%), RFO (0.16%), and solar, wind, and bagasse in smaller shares.