Electricity consumers across Pakistan could end up paying more for power as Independent Power Producers (IPPs) continue to buy imported coal under their existing supply contracts, even though a fresh round of competitive bidding has secured a significantly better discount on imported coal. The gap between the old deals and the new offers looks small on paper — just over a dollar a ton — but multiplied across the enormous volumes burned by coal power plants, it can translate into serious money on consumers’ electricity bills.
According to publicly available procurement details, the IPP in question initially bought imported coal at no discount at all against the international API-4 coal price index. Later interim arrangements with two suppliers improved that to a discount of $1.08 per metric ton. Then, after the National Electric Power Regulatory Authority (NEPRA) directed that fresh competitive bidding be held, the financial bidding concluded with an improved discount of $2.10 per metric ton — an extra $1.02 per ton saved over the interim deals.
The trouble is that the transition to the new suppliers has not happened yet. The IPP is still procuring coal under its previous arrangements while the onboarding of the new bidders remains pending — and the company has asked NEPRA for more time to continue its existing coal supply contracts. Every extra week under the older, costlier terms is fuel bought at a higher price than the market would now allow.
At a time when electricity affordability is one of the biggest worries for households and businesses in Pakistan, even a $1.02-per-ton difference matters. Large coal power plants consume millions of tons of coal a year, so seemingly tiny differences in per-ton procurement costs can add up to substantial sums that eventually flow into the fuel cost component of electricity tariffs.
The matter now turns on regulatory oversight. Temporary extensions of old contracts can be legitimate — supply chains cannot be switched overnight without risking disruption to power generation. But consumer advocates argue that NEPRA must ensure any such extension is restricted to the minimum period genuinely needed to complete the move to the new suppliers, so that contract extensions do not quietly become a way of locking in higher procurement costs for consumers.
The episode also underlines a broader question about how coal procurement is supervised in Pakistan’s power sector. When competitive bidding produces a clearly better price, the speed of the switch-over becomes a consumer-protection issue in its own right. Delays, extensions, and slow onboarding all carry a price tag — and it is electricity consumers who ultimately pay it.
For now, all eyes are on NEPRA’s next move. If the regulator tightens the timeline for the transition and enforces the freshly bid terms, consumers stand to benefit from lower fuel costs in the coming months. If the extensions drag on, the discount secured on paper may never reach the electricity bills it was meant to reduce — and the IPP coal procurement question will linger as another cost quietly added to the price of power in Pakistan.
