ISLAMABAD: Amid a government request for about Rs36.52 billion in additional recovery from power consumers in September for using expensive LNG imports and a similar burden expected the following month, the National Electric Power Regulatory Authority (Nepra) on Thursday announced that it would reject the special tariff incentive package if it was finalised without consulting the industry.

At a public hearing conducted by Nepra members Maqsood Anwar Khan, Amina Ahmed and Ghulamullah Shaikh, Central Power Purchasing Agency (CPPA) Chief Executive Officer Rehan Akhtar said the major reason for the Rs2.52 per unit additional fuel cost in July was the “so far highest” RLNG cargo purchases from the spot market in the absence of contract cargos from Qatar due to the closure of the Strait of Hormuz.

Many commentators raised questions over coal imports by power producers, particularly the Port Qasim Power Plant, which they alleged were unnecessarily burdening consumers, and asked the regulator to streamline the procurement process through a fair and transparent mechanism.

The industrial representatives, mostly from Karachi, reiterated their stance that the industrial support package on incremental consumption was faulty, as it did not benefit the majority of industries and should have been reconsidered after six months, as promised at the time of its introduction, but remained unchanged for the ninth month.

Industrial consumers question export of furnace oil at subsidised rate while govt charging hefty levy on domestic consumption

They also questioned the tariff rebasing introduced with effect from Jan 1, saying the benchmarks were lowered to reduce the budgeted subsidy, but fuel costs later increased, putting an additional Rs206bn burden on consumers through additional FCAs and quarterly adjustments.

They said Nepra had directed the Power Division to come up with an incremental tariff review after consultations with the industry within six months, but it had not consulted them so far.

Nepra Member Amina Ahmad said the Power Division had already submitted a review of the incremental package, but it was unfortunate to hear that industrial consumers remained unheard. She announced that the regulator would not open the review request and would send it back to the Power Division unless it updated its proposal after comprehensive consultations with the industry.

Export of furnace oil

The industrial consumers also questioned the export of furnace oil at a subsidised rate while the government was charging a hefty petroleum levy on its domestic consumption. They said there was no justification for its export when the difference between RLNG and furnace oil was only Rs3 per unit despite the petroleum levy. They requested that petroleum levy collections on furnace oil be used to reduce industrial power rates as originally announced by the prime minister.

Mr Akhtar said the proposal was valid and was currently under consideration by the government, but warned that it would be an uphill task to materialise given the technicalities tied to the IMF programme.

He said the non-availability of contract cargos of LNG meant not only that more RLNG had to be imported for Punjab-based mega power plants for system stability, but the shortfall was also met through higher imported coal-based generation.

He said a government decision to stagger refuelling of the Karachi Nuclear Power Plant (K-III) to make up for the shortfall also went against the consumer interest as circumstances had changed. The 1,100MW K-III would now return to full generation by Aug 31 instead of the originally planned shutdown from April 20 to June 20.

The public hearing was told that the cost of RLNG-based power generation surged to Rs47.4 per unit in July from less than half the previous month’s level, as expensive spot cargos were arranged in July due to the suspension of supplies from Qatar following the US-Iran war.

Despite this massive rise in the RLNG-based fuel cost of power generation in July, the worst is yet to come, as RLNG prices had further jumped by almost one-third in August. That would translate into an additional burden on consumers in October’s billing, Mr Akhtar conceded.

Once approved, power companies would charge an additional amount of about Rs36.55bn to consumers of all power companies, including ex-Wapda distribution companies (Discos) and K-Electric, in September bills.

Published in Dawn, August 28th, 2026