Tag: Fuel Cost Adjustment

  • NEPRA approves Rs1.75 per unit tariff hike to recover Rs40 billion

    NEPRA approves Rs1.75 per unit tariff hike to recover Rs40 billion

    The National Electric Power Regulatory Authority (NEPRA) has approved an increase of Rs1.75 per unit in the electricity tariffs for distribution companies (Discos) and K-Electric (KE).

    This increase, aimed at recovering an additional Rs40 billion, will apply to the fourth quarter of FY2023-24 (April-June) under the Quarterly Tariff Adjustment (QTA) mechanism.

    The additional charges will be reflected in consumers’ electricity bills for September, October, and November 2024.

    However, due to the termination of a previous Rs0.93 per unit adjustment for the third quarter (January-March 2023-24), the net increase in bills during this period will effectively be Rs0.82 per unit.

    For KE customers, the federal government will cover the QTA increase through subsidies allocated for FY2024-25, meaning KE consumers will not directly bear this cost.

    In addition, NEPRA has approved a negative adjustment of Rs0.37 per unit under the Fuel Cost Adjustment (FCA) for Discos for the month of July 2024. This reduction will appear in September 2024 bills, except for domestic consumers using up to 300 units per month.

    According to Business Recorder, since an existing FCA charge of Rs2.56 per unit, applied in August 2024 bills, is set to expire, a combined relief of Rs2.93 per unit will be passed on to consumers in their September 2024 bills.

    According to NEPRA, when both adjustments are taken into account, consumers will experience a total relief of Rs2.11 per unit in their September bills.

  • Electricity prices increased by Rs2.56 per unit under fuel cost adjustment

    Electricity prices increased by Rs2.56 per unit under fuel cost adjustment

    In a move likely to compound the financial difficulties faced by inflation-burdened citizens, the federal government announced a Rs2.56 per unit increase in the power tariff on Thursday.

    This adjustment, pertaining to fuel cost adjustment (FCA) for June, will be reflected in electricity bills issued in August.

    This tariff hike is part of a strategy to bolster Pakistan’s chances of securing a new programme from the International Monetary Fund (IMF). The National Electric Power Regulatory Authority (Nepra) has officially notified the increase, which will exclude lifeline and K-Electric consumers.

    The new tariff adjustment is expected to impose an additional financial burden of Rs33.45 billion on consumers. With the inclusion of an 18 per cent GST, this figure is projected to rise to Rs39 billion. The Central Power Purchasing Agency (CPPA) had proposed a slightly higher increase of Rs2.63 per unit under the FCA.

    The surge in electricity costs, coupled with escalating taxes, has sparked significant public dissatisfaction, leading to protests and sit-ins from communities already struggling with the rising cost of living.

    This public outcry has pressured the government to explore options for reducing electricity rates in an effort to alleviate some of the financial strain on the populace.

    Last month, Prime Minister Shehbaz Sharif’s administration had already implemented a substantial increase in the base electricity tariff for domestic consumers, raising it to Rs48.48 per unit. Consumers in Karachi were also affected by this hike.

    However, a temporary reprieve was granted to those using up to 200 units per month, who will not see their rates increase for the next three months.

    Additionally, the power regulator has approved the federal government’s request for tariff increases affecting commercial, general services, bulk, and agricultural consumers.

  • Nepra approves Rs7.056 per unit hike for power consumers

    Nepra approves Rs7.056 per unit hike for power consumers

    In a setback for the already burdened public grappling with inflation, the National Electric Power Regulatory Authority (Nepra) has greenlit a fuel cost adjustment, paving the way for a Rs7.0562 per unit increase in tariffs for March 2024.

    This decision grants state-run power distribution companies the authority to impose additional charges, projecting a staggering financial burden of around Rs56 billion on consumers.

    This figure could potentially soar to nearly Rs66 billion, taking into account the 18 per cent general sales tax (GST).

    It’s important to note that this tariff adjustment is applicable across all consumer categories, except for electric vehicle charging stations (EVCS) and lifeline consumers.

    The Central Power Purchasing Agency (CPPA), representing the distribution companies, had initially sought Rs7.13 per unit in its petition.

    Earlier this month, The News highlighted the plea from ex-Wapda distribution companies (XWDiscos) seeking Nepra’s approval for the Rs7.13 per unit increase.

    This was attributed to a significant drop in hydropower production and systemic constraints, such as the incapacity of the high-voltage direct current (HVDC) transmission line to efficiently transport economically viable power from southern producers to the north.

    Amidst these developments, commentators express concern over the substantial surge in fuel costs, reaching Rs14.6206/kWh for January 2024.

    In response, Nepra has taken decisive action, initiating an investigation under Section 27-A of the NEPRA Act to uncover the reasons behind this significant fuel cost, as claimed by CPPA-G for January 2024.

  • NEPRA okays Rs3.21 per unit hike in power tariff

    NEPRA okays Rs3.21 per unit hike in power tariff

    A quarterly adjustment of Rs3.21 per unit of power for the period of April to June 2022 has been approved by the National Electric Power Regulatory Authority (NEPRA).

    A further burden of Rs93.95 billion will be placed on energy consumers as a result of the most recent price increase. To be effective as of October 1, 2022, the authority transmitted its decision to the federal government.

    According to specifics, the prior adjustments’ time period ended on September 3, 2022. As of October 1, the electricity customers will not receive any respite as the authority implements fresh adjustments immediately following the expiration of the prior adjustment.

    For K-Electric customers, the NEPRA earlier in the day authorised a cut in power rates of Rs4.89 per unit due to a fuel cost adjustment (FCA) for August 2022.

    The notification states that, in contrast to KE’s plea for Rs4.21, the fuel cost adjustment for K-Electric customers would be reduced by Rs4.89 per unit. However, it specified that the tariff cut for July would only be valid for that particular month.

    According to the NEPRA, all consumer categories would be affected by the drop in FCA, with the exception of lifeline consumers, home consumers consuming up to 300 units, agriculture consumers, and EVCS (Electric Vehicle Charging Station).

  • Weekly inflation down 8.1% due to lower FCA, timely import of vegetables

    Weekly inflation down 8.1% due to lower FCA, timely import of vegetables

    Weekly inflation measured by the Sensitive Price Indicator (SPI) for the week ending September 22, 2022, decreased by 8.11 per cent.

    The year-over-year (YoY) trend shows a rise of 29.28 per cent, which is down around 11 per cent from the 40.58 per cent observed last week. The YoY rise stayed above 40 per cent during the previous five weeks, reaching an all-time high of 45.50 per cent.

    The price increase over the previous year was mostly brought on by an increase in prices of tomatoes (117.55 per cent), diesel (105.12 per cent), petrol (91.87 per cent), pulse masoor (75.38 per cent), pulse gram (73.55 per cent), mustard oil (65.64 per cent), cooking oil-5 litre (63.63 per cent), washing soap (61.50 per cent), vegetable ghee-2.5 kg (59.42 per cent), pulse mash (56.93 per cent), vegetable ghee-1 kg (56.09 per cent), onions (50.83per cent) and LPG (49.89 per cent), while decrease was observed in the prices of electricity for q1 (45.61 per cent), chilies powder (43.05 per cent), sugar (19.20 per cent) and gur (3.37 per cent).

    According to the most recent PBS data issued on Friday, the SPI for the week under review in the aforementioned category was recorded at 203.21 points compared to 221.14 points observed in the previous week.

    Out of 51 items, 26 items (50.98 per cent) saw price increases during the week, 10 items (19.61 per cent) saw price decreases, and prices of 15 items (29.41 per cent) remain unchanged.

    For the first quarter, power charges were among the items whose average prices decreased on a week-over-week (WoW) basis showing a decrease of 64.23 per cent.

    Other items which recorded a decrease include tomatoes (8.15 per cent), LPG (3.82 per cent), bananas (1.90 per cent), garlic (1.31 per cent), pulse masoor (0.99 per cent), cooking oil-dalda or other similar brand (sn), 5 litre tin each (0.78 per cent), onions (0.46 per cent), vegetable ghee-dalda/habib 2.5 kg tin each (0.34 per cent) and vegetable ghee-dalda/habib or other superior quality 1 kg pouch each (0.06 per cent).

    The general populace has been impacted by the heavy rains and flooding since they are lacking in basic commodities while supply lines for food products have been disrupted.

    On the other hand, timely imports from Iran and Afghanistan are accountable for the decrease in vegetable prices, particularly for onions and tomatoes.

  • PM orders discos to suspend staff leaves and work nonstop to correct electricity bills

    PM orders discos to suspend staff leaves and work nonstop to correct electricity bills

    The staff of power distribution companies (DISCOs) must work nonstop to correct the electricity bills of consumers using less than 200 units per month, following a directive from Prime Minister (PM) Shehbaz Sharif.

    He gave the order for all staff members’ leaves to be ended, the bills should be corrected right away, and a report should be given to him. In order to deposit electricity bills in the upcoming days, he continued, the banks should be instructed to stay open.

    PM Shehbaz gave the orders while presiding over a high-level meeting to address the issues facing electricity consumers.

    Furthermore, a high-level committee was formed by the prime minister to address the issues of power users.

    The gathering was informed that efforts are being made to ensure the adoption of the relief package for power consumers that the prime minister had announced. According to him, bill adjustments are being made as part of the relief for 16.6 million consumers related to the change in fuel prices.

    The relief measures must be put into effect right away, according to directives issued by the prime minister.

  • PM Shehbaz announces relief for 17 million power consumers

    PM Shehbaz announces relief for 17 million power consumers

    Prime Minister Shehbaz Sharif stated that 17 million of the nation’s electricity consumers would not be required to pay the excessive fuel cost adjustment (FCA) charges that are included in their monthly bills.

    According to Express, the prime minister outlined the rationale behind the FCA and claimed that it had resulted in a substantial increase in power rates for July and August due to high international oil prices.

    He claimed that following discussions with the IMF, PML-N leader Nawaz Sharif, and other coalition leaders, it was decided that 17.1 million energy users would not be required to pay the FCA.

    The remaining 13 million power consumers who are in a better financial situation are also being reviewed by the government, according to PM Shehbaz.

    Later, the PML-N tweeted that the relaxation will only apply to people with low electricity consumption.

    Shehbaz stated that Power Minister Khurram Dastgir will give a thorough explanation of the announcement’s process and how it would actually operate.

    The FCA exception would also apply to tube well users, who the prime minister estimated to number approximately 300,000.

    Earlier, PM Shehbaz also abolished the budget’s fixed tax on traders.

  • Fuel Cost Adjustment: Consumers protest against inflated electricity bills

    Fuel Cost Adjustment: Consumers protest against inflated electricity bills

    Power consumers protested in major cities against the government and power supply companies due to excessive residential and commercial bills that were issued under the pretext of Fuel Cost Adjustment (FCA).

    A number of Lahore residents were seen protesting outside LESCO offices, complaining about the skyrocketing electricity bills, chanting anti-LESCO slogans at Dharam Pura, Begum Kot and Ghazi Road.

    A number of farmers in Jhang also participated in a protest by burning their power bills while obstructing traffic on the Jhang Road. On the other hand, the shopkeepers and locals of Faisalabad organised a sizable protest against FESCO for billing residential and commercial customers for nearly twice the actual cost of electricity.

    PM Shehbaz demands urgent report on inflated electricity bills

    In response to complaints from the public about excessive electricity bills, Prime Minister Shehbaz Sharif ordered the relevant authorities to provide an immediate report to address the issue.

    The premier ordered the concerned officials to present a thorough report with recommendations for resolving consumer complaints against energy bills on an urgent basis.

    What is FCA?

    In addition to criticising the power supply companies, consumers are questioning the FCA charges that take up a significant portion of their monthly bills.

    Understanding the actual fuel cost (the cost of fuel in a month) and the reference fuel cost is crucial for comprehending the fuel price adjustment.

    Simply put, FCA is charged/adjusted in customers’ monthly bills to reflect the actual increase or decrease in fuel prices.

    Based on the price of fuel (such as coal, LNG, or furnace oil) used in the nation’s various energy sources, the total cost of fuel used in the production of electricity in a month (basket fuel cost) is calculated.

    The entire fuel cost for that month is therefore compared to the reference fuel cost at the end of each month, and as a result, the FCA is applied to the power bills after two months.

    The electricity bill will reflect a change in the FCA amount if the total fuel cost for that month exceeds the reference cost, while it will reflect a change in the FCA amount if the total fuel cost is less than the reference cost. We refer to this as a fuel price adjustment.

    How power suppliers calculate FCA?

    Whenever a power plant uses coal, it is possible to estimate how much coal was burnt and at what cost, as well as the total cost of the energy needed to generate the power.

    For instance, if hydel electricity generation has increased, the overall fuel price will reduce; likewise, if gas is consumed more frequently in a month due to its higher price, the fuel price would climb.

    It is also impacted by the rupee’s appreciation or depreciation. This is due to the fact that coal, LNG, and furnace oil are imported, therefore a weakening or strengthening rupee directly affects the cost as a whole.

  • Cabinet approves Rs7.91 per unit increase in power tariff

    Cabinet approves Rs7.91 per unit increase in power tariff

    After several postponements, the Federal Cabinet finally decided to approve the Rs7.91 per unit increase in the power tariff.

    The Federal Minister of Power, Khuram Dastgir, and Minister of Petroleum, Musadik Malik, made the announcement during a press conference.

    Dastgir claimed that because Prime Minister (PM) Shehbaz Sharif wanted to provide relief to the masses. The consent was not given until 45 per cent of the population had been exempted from the tariff increase.

    Musadik Malik, the minister of petroleum, disclosed that by leaving out the protected sector, the homes with consumption of less than 200 units per month, or up to 90 million people, had been left out of the price increase.

    Previously, the government’s proposal for the tariff increase was subject to the National Electric Power Regulatory Authority’s (NEPRA) reserve decision, according to Dawn.

    In accordance with the approval, the government will raise the rate by Rs3.5 per unit starting on July 26. A similar price rise will be implemented in August. The cost would then be raised by Rs0.91 per unit in October by the government, bringing the total rise to Rs7.91.

    Malik blamed the previous administration’s lack of frequent fuel adjustments and transmission losses rebasing for the sharp increase in tariffs. Fuel surcharges were raised without notifying the public at the final rebasing, which took place in February 2021.

    The power minister informed the media that the present administration had paid Rs214 billion toward circular debt, bringing the total down from Rs2,476 billion on March 31, 2022, to Rs2,253 billion on June 30, 2022.

  • Nepra approves price increase of Rs9.66 per unit for Karachi

    Nepra approves price increase of Rs9.66 per unit for Karachi

    On account of the fuel cost adjustment (FCA) for May 2022, the National Electric Electricity Regulatory Authority (Nepra) allowed K-Electric to increase its power rate by Rs9.66 per unit on Monday.

    According to Aaj News, Nepra will make the announcement following careful consideration.

    In order to transfer the financial burden of Rs22.65 billion to consumers for May 2022, K-Electric requested an increase of Rs11.34 per unit.

    Officials from Nepra questioned K-Electric during a hearing about why it wasn’t buying less expensive electricity and offered to help K-Electric establish a connection with the provincial and federal governments for this reason.

    The power distributor also questioned K-Electric’s decision not to use the inexpensive oil it had acquired for power production.

    Nepra’s representatives responded that the company was using peak hours, which are from 6:30 PM to 10:30 PM, to provide electricity and that the cost of power is much greater at these times.

    The FCA estimate for May 2022, according to K-Electric, was based on the requested rate for the month from CPPA-G and is subject to change based on a decision to be made by Nepra.

    In its FCA adjustment request, the power utility informed the regulator that it imports from outside sources and dispatches power from its own generating units (with the available fuel resources) in accordance with economic merit orders (EMOs).