What happened
According to a report by Dawn, representatives from the manufacturing sector and officials from the power division have jointly called for removing or reducing petroleum levies on diesel and furnace oil used in power generation. The proposal was voiced during a public hearing held by the National Electric Power Regulatory Authority (Nepra). The session examined a request by the Central Power Purchasing Agency (CPPA) to charge consumers an additional monthly fuel cost adjustment (FCA) of Rs 2.56 per unit in November bills, seeking to recover roughly Rs 33 billion for electricity consumed in September.
Key facts
- The CPPA stated that the actual fuel cost for September was Rs 10.022 per unit against a baseline of Rs 7.46 per unit, creating an estimated financial impact of Rs 32.76 billion.
- Petroleum levies are currently set at approximately Rs 76,000 per tonne for furnace oil and Rs 80 per litre for diesel, which participants said adds around Rs 10 per unit to overall generation expenses.
- Because of limited supplies of liquefied natural gas (LNG), expensive furnace oil and diesel accounted for 3.6 percent of total power generation during September.
- The actual net FCA increase in November is anticipated to be limited to Rs 1.45 per unit, as a previous positive adjustment from October will expire.
- Overall electricity demand rose by 6.5 percent in September, supported by a 6.7 percent increase in industrial consumption.
- The final decision by the regulator regarding the request was not specified in the source; please check the official notice.
Why it matters
As reported by Dawn, industrial representatives emphasized that eliminating fuel levies could drop generation costs from about Rs 62 per unit to between Rs 44 and Rs 50 per unit. They pointed out that high taxes artificially inflate tariffs and expand government subsidies. Industry leaders and regulatory officials also cited discrepancies in CPPA generation records and called for formal inquiries into coal procurement costs at the Port Qasim plant. Officials from the power division acknowledged that petroleum levies heavily affect tariffs and noted ongoing efforts to lower electricity costs to make local industries competitive with regional markets.
Source: Dawn - Home · Published October 30, 2026 · Photo by Gowtham AGM on Unsplash
