Govt plans to increase electricity price by a whopping Rs6.10

CPPA sends request to Nepra
Feb 19, 2022

The Central Power Purchasing Agency has requested the National Electric Power Regulatory Authority to increase electricity prices by Rs6.10 per unit for the month of January 2022.

The hike has been requested in context of last month's fuel price adjustment.

In a letter submitted on Saturday, CPPA said the cost of generating electricity in January was Rs12.61 per unit, more than half of what was estimated by the agency. It, therefore, wants consumers to pay for the extra charges incurred.

CPPA reasoned high charges with an increase of fuel price detailed below:

  • High speed diesel got expensive by Rs25.98 per unit
  • Furnace oil price increased by Rs22.8 per unit
  • LNG increase by Rs16.7 per unit.
  • Imported coal increased by Rs14.10 per unit.

NEPRA will hear the request on February 28. The increased charges won't be applicable on K-Electric consumers.

Last year too, in December, consumers were asked to pay Rs3.09 more per unit in power tariff on the account of fuel charges adjustment. It put an extra burden of around Rs30 billion on the consumers.

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.

The increase in electricity prices comes after the government increased petrol prices to a historic high of Rs159.86 per litre on February 15. The price of high-speed diesel has been hiked by Rs9.53 to Rs154.15. The price of kerosene oil went up by Rs10.08 to Rs126.59 and light diesel by Rs9.43 to Rs123.97. 




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