The National Electric Power Regulatory Authority (NEPRA) has increased the electricity tariff by Rs. 7.90 per unit under fuel price adjustment (FPA) for May 2022.
The Central Power Purchasing Agency (CPPA) had requested to increase the electricity tariff by Rs. 7.96 per unit for May under the fuel price adjustment. Chairman NEPRA, Tousif H Farooqi, presided over the hearing on the application of CPPA. Other members of NEPRA also attended the hearing.
During the hearing, NEPRA was informed that the prices of fuel coal and LNG have increased in the international market. The prices of LNG in the international market were jacked up from $8 to $42 within one year adding the LNG is not available for spot purchasing. Due to the high cost of imported fuel, it is important to increase the use of local coal for power generation, the CPPA officials said.
Chairman NEPRA inquired behind the reason for such a big increase since a less amount of expensive fuel was used during May. The Chairman said that two years ago, the NEPRA tried to give a tariff of Rs. 7 per unit to some renewable energy projects but CPPA had opposed it and said that there is already a capacity trap and no more electricity should be generated. If the CPPA had not opposed to those projects, then the cheap renewable energy would have been available today in the country, Chairman NEPRA said.
While responding to the chairman, the officials of CPPA claimed that no one knew what will happen after two years. On the occasion, Member NEPRA Sindh, Rafiq Shaikh said that bad governance is the real problem of the power sector that needs to be solved.
Chairman NEPRA responded that the authority can’t provide relief to consumers due to expensive imported fuel. “There are only two solutions, either load shedding or generating expensive electricity”, Chairman NEPRA said. Cheap electricity is possible only because of green fuel, he further said.
According to the initial calculations of the NEPRA, the fuel price adjustment for May 2022, will be increased by Rs. 7.90 which will be added to the bill for July 2022. According to the estimate, the electricity consumers will pay an additional Rs. 113 billion during one month. This increase will be only for one month. This increase will not be applicable to the consumers of K-Electric and lifeline consumers.
