LNG replaces oil as costliest source of power

The government has formally acknowledged that imported liquefied natural gas (LNG) has become the most expensive fuel for power generation in the country, even surpassing furnace oil for whose replacement the multibillion-dollar LNG infrastructure was set up in the first place almost a decade ago. In a major decision setting the reference power-purchase tariff for each month of the current fiscal year, the National Electric Power Regulatory Authority (Nepra) has only reinforced that hydropower, at Rs6.94 per unit, remains the cheapest source of electricity supply to the national grid. This is way cheaper than the Rs51.42 per unit cost of power produced from imported LNG, which is regasified before being used as a fuel. It is followed by furnace oil-based power generation, projected at Rs48.56 per unit.