The National Electric Power Regulatory Authority (NEPRA) is all set to increase electricity prices for December. If approved, a burden of over Rs. 30 billion would be borne by electricity consumers in Pakistan.
Central Power Purchasing Agency (CPPA) has filed a petition to NEPRA to ascertain the Fuel Cost Adjustment (FCA) for the month of December 2021. Electricity prices are likely to increase by Rs. 3.12 per unit as demanded by the CPPA in its petition.
The petition states that the reference per unit cost determined is Rs. 5.53 per unit, while generation cost has triggered a high of Rs. 8.65 per unit. Therefore, the regulator shall allow an increase of Rs. 3.12 per unit.
The petition states that 8.52 billion units of electricity were generated in December 2021. The cost of power generation was Rs. 73.84 billion. The most expensive electricity was generated from furnace oil at Rs. 22.24 per unit while production from LNG cost Rs. 17.80 per unit.
The cost of generating electricity from coal was Rs. 13.31 per unit. Electricity was imported from Iran at Rs. 13.26 per unit. NEPRA will hear the request for an increase in electricity prices on February 1. In case of an increase, there will be an additional burden of more than 30 billion on consumers.
On the other hand, K-Electric has applied for a reduction of Rs. 1.79 per unit in electricity prices in NEPRA. The request for a reduction in electricity prices was made in the context of monthly fuel adjustment for the month of December 2021. NEPRA will hold a hearing on 2 February at the request of the K-Electric. If K-Electric’s application is approved, consumers will get a relief of Rs. 2.10 billion.
It is pertinent to mention here that shortages of LNG, electricity generation on Furnace Oil, and running inefficient power plants have burdened electricity consumers to almost Rs. 100 billion in terms of fuel cost adjustments in the last 4 months. In Pakistan, which is seeing double-digit inflation, the consumers’ woes are increasing with consecutive 3 months’ increase in reference fuel cost adjustments.