According to information recently issued by the National Electric Power Regulatory Authority, the cost of fuel for power generation in November decreased by more than one-third to Rs 5.99 per unit from a month earlier.
According to Tahir Abbas, head of research at Arif Habib Ltd., the cost of coal-based power dropped by 27.1% in November, which helped to offset the total decline in fuel prices of 33.6%.
Thanks to the installation of power facilities using Thar coal, the price of coal-generated electricity per unit fell from Rs17.61 in October to Rs12.84 in November. Local coal is substantially less expensive than global coal since it is not benchmarked to worldwide pricing.
In a similar vein, the price of re-gasified liquefied natural gas (RLNG) decreased on a monthly average by 16.2 percent, which reduced the cost of fuel used to produce power overall in November.
The long-term RLNG contracts that Pakistan has with Qatar for gas imports are benchmarked to Brent, one of the indexes that reflects the price of oil on the world market. A decline in Brent has indirectly reduced Pakistan’s natural gas import expenses.
In November, imported gas made up 12.1 percent of the country’s total energy mix, down 45.1 percent from the previous month. In November, hydel resources, which are essentially free of charge, generated over three out of every ten power units. However, due to the decreased water flow in rivers, the quantity of electrical units generated by hydropower last month was 21% fewer than a month earlier.
Additionally, the use of nuclear power reduced November’s overall generating cost. Its monthly per-unit rate remained constant at Re1.07. Its contribution to the electricity mix climbed from 20.6 to 27.9 percent in only one year.
Furnace oil-based electricity remained the most costly energy source despite costs falling 28.2 percent month over month to Rs24.18 per unit. It makes sense that its proportion of the electricity mix last month was so minimal.