By Staff Reporter
ISLAMABAD: The power regulator approved a fuel-cost surcharge of about 2.37 rupees per unit for most electricity users and raised the discounted rate for extra industrial and farm consumption to 25.30 rupees, prompting the government to insist that factory tariffs haven’t gone up.
The National Electric Power Regulatory Authority notified the surcharge on Saturday. It reflects fuel costs for September, and the adjustment will appear in electricity bills for November 2026. The exact figure is 2.3673 rupees per unit., which round it to either 2.36 or 2.37 rupees. The Central Power Purchasing Agency had sought 2.56 rupees. The agency said the average fuel cost of generation was estimated at 7.46 rupees per unit for September but came in at 10.02 rupees.
The surcharge applies to customers of K-Electric and the ex-state distribution companies. Exempt are lifetime consumers, electric-vehicle charging stations and prepaid customers on the prepaid tariff. The regulator said it must be shown separately on bills based on units billed in September. If any November bills went out before the notification, the charge can be applied the following month.
It is the latest in a run of increases. The regulator raised tariffs by 0.75 rupee per unit last month for June fuel costs, and approved 2.06 rupees for July fuel costs, along with a quarterly adjustment of about 0.52 rupee collected over September through November.
Industrial Package
In a separate decision, Nepra approved a 2.32-rupee increase in the concessional rate for additional power use by industrial and agricultural consumers, taking it to 25.30 rupees per unit from 22.98 rupees. The new rate takes effect with November billing, and the decision was forwarded to the federal government. The regulator’s chairman cast the deciding vote. Members Amna Ahmed and Maqsood Anwar Khan filed dissenting notes and described the proposed rate as having no basis.
The incremental consumption package is a three-year scheme running from November 2025 to October 2028. Existing consumption is billed at current rates, and only usage above a reference level is charged at the discounted rate. Eligible consumers pay on usage above their reference level for December 2023 to November 2024. The government has offered it as a way to put surplus generation capacity to use at prices well below prevailing tariffs, about 34 rupees for industry and 38 rupees for agriculture, without shifting costs to households. The government currently provides relief of 11 to 15 rupees per unit on this extra consumption.
The package was drawn up when demand from both sectors was weak. The Power Division said at the time that industrial demand had contracted 14% and agricultural demand 47%, which it attributed to macroeconomic adjustments and a shift to alternative supply.
The revision followed a months-long review. Nepra asked the Power Division on June 16 for a comprehensive review of actual marginal cost, and on Sept. 9 the ministry asked Nepra to carry out the review itself, including a public hearing. Nepra held that hearing on Oct. 5. The regulator has cautioned that the figures are not final. Lacking hourly data on incremental consumption, it assumed monthly incremental units were spread evenly across each month.
Government Response
After media reports suggested the industrial tariff had risen to 25.30 rupees, a Power Division spokesperson called the reporting incorrect and misleading. The figure, the spokesperson said, is the revised marginal rate under the package and not the industrial tariff.
The spokesperson said the industrial tariff has fallen by about 18.94 rupees per unit, including taxes, from the rate in March 2024. The average industrial rate in October was 34.40 rupees per kilowatt-hour, the spokesperson said. The package rate is being revised because marginal generation costs have risen with the war in the Gulf, the spokesperson said, adding that the new rates apply from November 2026. The adjustment, in line with Nepra’s determination, is meant to keep the cost of the relief from being passed to other consumers, particularly those who don’t benefit from the scheme.
The Power Division said the package covered 6,940 gigawatt-hours of incremental consumption from December 2025 through September 2026, delivering an estimated 43.5 billion rupees of benefit. Industrial users received 5 to 10 rupees per unit of relief on incremental consumption, lowering their overall bills by an average of 1.5 to 2.5 rupees per unit. So far, 209,335 of 518,316 eligible consumers, about 40%, have used it.
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