Islamabad witnessed a significant development in the energy sector on February 27, 2026, as electricity prices across Pakistan are poised for a possible increase of Rs 1.78 per unit. This proposed adjustment will affect consumers nationwide, including those in Karachi, the country’s largest metropolis. The matter was brought under discussion during a recent hearing held by the National Electric Power Regulatory Authority (NEPRA), the body responsible for regulating electricity tariffs and ensuring fair pricing for consumers.
The request for this tariff revision was submitted by the Central Power Purchasing Agency (CPPA), which manages the procurement of electricity from various power producers. Officials from CPPA highlighted that the primary driver behind this proposed hike is the surge in fuel costs recorded in January 2026. The rise in fuel expenses has directly impacted the cost of electricity generation, compelling the agency to seek an adjustment in the tariff to cover these additional expenditures.
Delving deeper into the figures, Pakistan sold approximately 8.76 billion units of electricity during January. The reference fuel cost, which serves as a benchmark for calculating electricity prices, was initially estimated at Rs 10.39 per unit. However, the actual fuel cost escalated to Rs 12.17 per unit, reflecting a significant increase. This spike was attributed to a combination of factors, including a reduction in hydropower generation due to lower water availability and an overall rise in electricity demand during the winter months. Consequently, the CPPA formally requested NEPRA to approve a tariff increase of Rs 1.78 per unit to offset these higher costs.
During the NEPRA hearing, members expressed serious reservations about the ongoing reliance on furnace oil-based power plants, which are known for their high operational costs and environmental impact. Amna Ahmed, NEPRA Member for Tariff and Finance representing Punjab, questioned the rationale behind the continued use of these expensive power plants, especially as electricity prices keep climbing. She emphasized that this approach might not be in the best interest of consumers, who are already burdened by rising utility bills.
Another NEPRA member, Maqsood Anwar, echoed these concerns by pointing out that a substantial portion of the increased costs stemmed from dependence on furnace oil for electricity production. He suggested that this reliance on costly fuel sources highlights deeper structural challenges within Pakistan’s power sector that need urgent attention. If NEPRA approves the proposed hike, it will also extend to customers of K-Electric, the sole electricity provider in Karachi, as per government policy aimed at maintaining uniform tariff adjustments across the country.
Officials clarified that the use of expensive power plants fueled by furnace oil was primarily to meet peak electricity demand during high consumption periods. However, the continued dependence on such costly energy sources underscores the persistent inefficiencies and vulnerabilities in Pakistan’s electricity generation mix. The sector continues to grapple with issues such as fluctuating fuel prices, inconsistent hydropower output, and operational challenges, all of which contribute to the unstable pricing environment.
This looming tariff increase comes at a time when many households across Pakistan are already feeling the strain of rising living costs. The potential rise in electricity bills will add to the financial pressures faced by ordinary consumers, especially those in lower and middle-income brackets. As the nation awaits NEPRA’s final decision on the matter, stakeholders hope for a balanced resolution that addresses both the financial sustainability of power producers and the affordability concerns of consumers.
