Consumers to pay Rs4.74 per unit more for October electricity usage

The National Electric Power Regulatory Authority or Nepra has increased electricity tariff by Rs4.74 per unit for the month of December.

According to a notification issued on Friday, electricity prices have been increased on account of fuel price adjustment for the month of October. The additional charges will be adjusted in the bill for December.

Expensive electricity would impose an additional burden of more than Rs60 billion on consumers. The increase will not apply to K-electric consumers.

On November 22, the Central Power Purchasing Agency (CPPA) demanded that distribution companies (Discos) be allowed to charge Rs4.75 per unit additional fuel cost to consumers to raise Rs61 billion next month.

The CPPA said that the production cost of electricity in October was Rs5.17 while the reference fuel cost for the period was Rs9.92 per unit.

The hearing, on the request from the CPPA, was held on November 30.

Fuel Charges Adjustment is a component of the electricity tariff. The tariff or price of electricity includes charges for fuel (furnace oil) used in electricity generation. The price taken at the time of billing varies over the course of the month because of changes in international oil prices. It can increase or decrease, which needs adjustment.

The Fuel Charges Adjustment is the mechanism that allows power companies to do this and recover any legitimate increase in fuel cost.