NEPRA Okays Price Hike in Fuel Adjustments for K-Electric and Other Distribution Companies

NEPRA has approved the K-Electric’s Fuel Adjustment Charges (FCA) of PKR. 4.82/kWh for the month of March 2022. The approved FCA will be charged to consumers in the month of June 2022.

It will be shown separately in consumers’ bills on the basis of units billed to the consumers in the respective month to which the adjustment pertains. FCA is decided by NEPRA on the basis of a public hearing conducted on 27 April 2022 over the FCA petition submitted by K-Electric.

Recently, NEPRA also approved an increase of PKR 2.86/kWh for XWDISCOs operating all over Pakistan.

As the prices of imported fuels such as RLNG and furnace oil continue to see a steep hike internationally, the FCA for the upcoming months will also see an upward trend and further burden the energy consumers across the country. As per the sources, the cost of RLNG has gone up by 93% in April 2022 on a YoY basis. Similarly, the cost of power generation by furnace oil also increased by 135% YoY.

In the face of soaring international fuel prices, experts warn that the nation will face an energy crisis and predict that the masses are going to be very adversely impacted in the coming months in the name of FCA if the authorities fail to take immediate measures to arrest the situation.

Experts are of the view that the high cost of electricity will ultimately go beyond the affordability of household consumers and small businesses pushing them towards non-payment of their electricity bills which will ultimately become an additional burden on the power sector which is already gripped by the issues posed by rising circular debt.

In the light of such a grim situation, authorities are being urged by analysts to shift their focus on utilizing indigenous resources for power production and launch a nationwide energy conservation plan.

In the case of K-Electric, it should be barred from producing electricity via imported fuel such as RLNG and needs to be pushed to produce electricity via natural gas which is much cheaper in cost to provide a sigh of relief to its consumers and save them from rising fuel charges.