Electricity prices go up by Rs4 as shortfall surges

As the country grapples with hour-long power outages amid a surging shortfall, the electricity tariff has been raised by Rs3.99 per unit for the month of June.

The power regulatory body has adjusted the tariff under the pretext of fuel price adjustment for April.

The National Electric and Power Regulatory Authority (Nepra) held a public hearing to discuss the proposal propounded by the Central Power Purchasing Authority (CPPA) in which it demanded a hike of Rs4.56.

The hike would place an additional burden of Rs40billion on the consumers.

Nepra added that the cost of producing electricity went up in April due to drop in production from gas and LNG.

In April, 10.78percent less electricity was produced from LNG, while the production from gas dipped by 7.82percent. This difference was met by producing electricity from expensive furnace oil, which led to the rise in the cost.

The decision would not be applicable to the K-Electric consumers.

On April 27, Nepra had approved an increase of Rs4.83 per unit in K-Electric’s power tariff on account of the fuel price adjustment for March. The charges would be added to June 2022 electricity bills.

The decision to hike the tariff comes a few days after the government increased the prices of petrol and diesel by Rs30 on May 26.

The prices have been increased to meet the pre-conditions set by the International Monetary Fund (IMF) for the resumption of $6billion loan program.

Last week, Federal Finance Minister Miftah Ismail said the IMF had refused to release the next tranche of a $6 billion loan until subsidies on fuel and electricity are withdrawn.

Electricity shortfall surges

The power shortfall – difference between the supply and demand of electricity – has surged to 6,690megawatts. The shortfall has been increasing due to closure of various power plants due to the shortage of fuel.

The power shortage has also led to a rise in the duration of load shedding. The cities are experiencing power outages of up to six hours, while the duration has increased to up to 12 hours in villages.

According to official numbers, the demand for electricity is 26,000megawatts, while the production is 19,310megawatts.

Currently, 4,000mW electricity is being produced from hydel, 1,205mW from thermal, 2,254 from nuclear, while 9,323mW is being produced by private power producers.

What is Fuel Price Adjustment?

Fuel Price Adjustment or Fuel Charge Adjustments are the periodic increased of decrease in the prices of electricity to account for changes in the prices of fuel used to produce the electricity. The charges are decided by NEPRA after which, the changes are adjusted in customers monthly bills under the Fuel Price Adjustment head.