NEPRA approves Rs. 1.98 per unit hike in electricity bills for October 2025, driven by fuel cost adjustments and lower hydropower generation.
NEPRA Approves Fuel Cost Adjustment
A net increment of 1.98 per unit of electricity costs will be experienced by the electricity consumers in Pakistan in their October 2025 bills. This is a modification as the negative fuel cost adjustment (FCA) of 1.79 per unit in July heads into expiry and a new positive FCA of 0.19 per unit in August takes effect. The petition was presented to NEPRA by the Central Power Purchasing Agency (CPPA-G), on behalf of former Wapda distribution companies as well as K-Electric on the basis of escalated generation costs.
Breakdown of the Price Increase
The reference fuel cost available in August stood at Rs. 7.3149/unit against the available actual average generation cost of 7.5059/unit as quoted in CPPA-G. This disparity led to a demand to reclaim another Rs. 0.1911 per kilowatt-hour (kWh) of electricity by consumers, totaling Rs. 2.62 billion to the company in electricity charges in October alone. The net increase of Rs. 1.98 is explained by expiration of the negative FCA and the positive adjustment.
Fears about Taxes and Surcharges
The NEPRA hearing raised serious concerns among the representatives of consumers regarding the tax and surcharge layering. They have pointed out that a general sales tax (GST) of about Rs. 0.60 per unit is being imposed in addition to the surcharge of Rs.3.23 per unit that already exists. The federal government uses this surcharge to pay back loans of Rs. 1, 225 billion borrowed by 18 commercial banks. Other respondents claimed that the GST of 18 percent on the surcharge may result in faster repayment of the loan to achieve a five-year payback period.
Influence of the Industrial Consumers
The industrial consumers also sounded alarm, arguing that the cost of energy consumed by factories has already risen by 10 percent since the relief package that was initiated by the prime minister expired. Industrial per-unit tariffs have increased by 29 to 35, compromising the prior government pledges to provide power at $0.09 per unit. According to industry representatives, the increasing costs would negatively affect competitiveness and drag down exports.
Hydropower Decline Drives Higher Costs
The officials said that some of the rise was because hydropower generation went down in August. Excessive water in various provinces decreased the amount of water released by key dams to 38.8 percent of the energy mix, against 40.9 percent reference point. This deficit was pushing it to increased dependence on imported coal and regasified liquefied natural gas (RLNG) which are more costly, to the rising tariff pressure.
Flood Relief and Exemptions
During the hearing, there were concerns that the government recently announced flood-affected regions to be exempted of electricity bills. Power Division officials explained that the federal government will simply absorb the cost of these exemptions directly such that other consumers will not have to pay more. The intention behind this move is to offer specific relief to houses affected by the floods without disrupting the overall electricity tariff system.
Conclusion
The increment in the energy costs of 1.98 per unit in October electricity bills highlights the difficulty that Pakistan is struggling to utilize its energy mix and cost structure. By depending heavily on imported fuels, a falling production of hydropower and a steadily increasing tax and surcharge burden all consumers in every industry will still feel the money squeeze. Policymakers are currently under increasing pressure to reconcile between fiscal responsibilities and affordability and energy security.
