Electricity consumers in Pakistan may face another increase in power prices this winter. Along with possible load shedding, electricity bills are also expected to rise between December and February.
Sources in the Power Division say a shortage of water could reduce hydropower production.
As a result, power plants may have to rely more on expensive fuels. This could increase the cost of electricity generation.
The cost of electricity may rise by two to three times under the fuel price adjustment during the winter months.
A separate quarterly adjustment is also expected to increase the power tariff by Rs1.30 per unit.
Why could electricity prices increase?
According to Power Division sources, the water shortage could affect hydropower generation from December to February.
The Indus River System Authority (IRSA) has estimated a water shortage of more than 22 per cent during this period.
This could leave hydropower production at a very low level. Power plants may then have to use more expensive fuels such as liquefied natural gas (LNG) and coal.
Fuel prices in the international market have also remained high. The supply of local gas to power plants could become another challenge during winter.
These factors may increase electricity generation costs and force authorities to carry out more load management between December and February.
How much could consumers pay?
The upcoming quarterly adjustment is expected to increase electricity prices by Rs1.30 per unit. This could place an additional burden of around Rs22 billion on consumers.
Meanwhile, a hearing has already been held on a request to increase electricity prices by Rs2.56 per unit under the September fuel price adjustment.
If the Central Power Purchasing Agency’s (CPPA) request is approved, consumers could face an additional burden of around Rs33 billion.
Energy prices remain under pressure
Rising tensions in the Middle East have also pushed energy prices higher in Pakistan. After increases in petroleum prices, liquefied petroleum gas (LPG) has also become more expensive.
The price of LPG has increased by Rs343 per kilogram over the past year. The cost of a domestic LPG cylinder has also gone up by more than Rs4,000.
The government is preparing a new pricing formula for LPG. However, the proposed changes could make the fuel even more expensive for households.
