Unusual RLNG price drives up electricity cost
ISLAMABAD: The cost of regasified liquefied natural gas (RLNG)-based power generation surged by record 242 per cent to Rs47.4 per unit in July, from less than Rs14 in April, after the government purchased five expensive cargoes from the spot market in the month due to the suspension of supplies from Qatar following the US-Iran war.…
Key points
- Compared with the February price of $10.45 (Rs2,916) per mmBtu, the RLNG rate for August is around 148pc higher.
- Once approved, the power companies would charge consumers throughout all power companies, including ex-Wapda Distribution Businesses (Discos) and K-Electric, an…
- The fuel cost of local coal-based generation came in at Rs10.42 per unit compared to Rs16.34 per unit of imported…
- Wind projects contributed 4.5pc of the power supply, followed by 0.7pc of solar and 0.3pc of bagasse-based generation.
Unusual RLNG price drives up electricity cost
Chiefly because of LNG factor, the power businesses have sought a Rs2.52 per unit increase in fuel cost adjustment (FCA) to consumers nationwide in September bills despite 73pc generation in July from cheaper domestic, predominantly zero-cost fuel sources,
ISLAMABAD: The cost of regasified liquefied natural gas (RLNG)-based power generation surged by record 242 per cent to Rs47.4 per unit in July, from less than Rs14 in April. As RLNG costs jumped by almost one-third again in August, LNG contributed about 11pc of the total grid supply.
The National Electric Power Regulatory Authority (Nepra) has called a public hearing on Aug 27 to examine whether the Rs36.5bn further demand from power companies is justified, with a Rs2.52 per unit impact.
Despite this massive rise in the RLNG-based fuel cost of power generation in July, the worst is yet to come. That would translate into an additional burden on consumers in the October billing.
Power firms seek to extract Rs36.5bn more from consumers for July
The Oil and Gas Regulatory Authority (Ogra) had earlier notified a record 32pc rise in RLNG prices for August, fixing the rate at $25.83 per mmBtu for Sui Northern Gas Pipelines Ltd (SNGPL) and $25.09 per mmBtu for Sui Southern Gas Business Ltd (SSGCL). The August LNG imports translated into a retail RLNG price of around Rs7,204 per mmBtu, compared with Rs5,450 per mmBtu in July.
As no shipment could be secured from Qatar due to the US war on Iran, the revised RLNG price for August was based on five imported LNG cargoes procured from the spot market. This is the highest-ever increase in RLNG costs in the commodity’s decade-long history. Even the RLNG prices in July were around 15pc higher than June.
Compared with the February price of $10.45 (Rs2,916) per mmBtu, the RLNG rate for August is around 148pc higher. The sharp increase will further escalate fuel costs for power generation.
Nepra has already notified an additional burden of Rs9.8 bn on electricity consumers by allowing 75 paise per unit higher fuel costs in the August billing.
Once approved, the power companies would charge consumers throughout all power companies, including ex-Wapda Distribution Businesses (Discos) and K-Electric, an additional amount of concerning Rs36.55bn in their September bills.
What happened
The Central Power Purchasing Agency (CPPA). It filed a petition for a higher FCA for energy consumption in July, said power consumption was concerning 6pc higher than in the same month of the previous year. It reported 14,501 billion units (GWh) of consumption in July this year, compared to 13,666 billion units in the same month last year.
The CPPA reported that the reference fuel cost for July was set at Rs7.093 per unit, but the actual fuel cost turned out to be Rs9.61 per unit, necessitating an rise of Rs2.52 per unit in additional charges to be collected from consumers in the upcoming monthly bills.
Another minor reason for higher fuel costs was the utilisation of high-speed diesel- and furnace oil-based plants at Rs55 and Rs50 per unit, respectively. The combined contribution of these two fuels was less than 1.63pc in the overall grid supply.
This was despite the fact that almost 40pc power supply was based at zero fuel cost, followed by an 11pc share of local coal, a 6.5pc share of local gas, and a 10.1pc share of nuclear power – around 3pc lower than a month earlier. Wind projects contributed 4.5pc of the power supply, followed by 0.7pc of solar and 0.3pc of bagasse-based generation.
The details
The fuel cost of local coal-based generation came in at Rs10.42 per unit compared to Rs16.34 per unit of imported coal. Local gas-based generation cost worked out to Rs13.8 per unit, compared to Rs47.38 per unit for imported RLNG. Nuclear power’s fuel cost was reported at Rs3 per unit in July, compared to Rs2.85 per unit in June and around Rs1.13 per unit early this year.
Published in Dawn, August 19th, 2026
Khaleeq Kiani is an Islamabad-based reporter for Dawn, specializing in political economy, governance, business, finance, macroeconomics and energy. He can be found on X at @khaleeqkiani.
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