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15 Dhul-Hijjah 1445  

CCPA seeks Rs3.49 per unit increase in electricity tariff

If implemented, government will impose additional burden of Rs35b on consumers
Two boys walk on a wall near high voltage electricity wires in Rawalpindi, Pakistan, on July 8, 2020. AFP
Two boys walk on a wall near high voltage electricity wires in Rawalpindi, Pakistan, on July 8, 2020. AFP

The Central Power Purchasing Agency (CPPA) has sought Rs3.49 per unit increase in electricity tariff for the monthly fuel price adjustment for April.

If implemented, it would impose an additional burden of Rs35 billion on electricity consumers.

The National Electric Power Regulatory Authority (NEPRA) will hold a hearing on May 30 on the CCPA’s request.

In its request, the CPPA stated that no electricity was generated from furnace oil and diesel in April. Instead, 22.96% of electricity was generated from water, 10.19% from local coal, 11.28% from domestic gas, and 24.97% from imported LNG. Nuclear fuel contributed 23.64% of the total electricity generation in April.

Based on these changes in the energy mix, NEPRA is expected to approve an increase in the electricity tariff for consumers across Pakistan. This will result in an additional burden of Rs35 billion on the public.

The upcoming tariff hike is part of the government’s efforts to rationalize electricity prices and pass on the increased cost of generation to the end consumers.

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Last month, the National Electric Power Regulatory Authority announced an increase of Rs2.83 per unit in electricity prices for consumers in Pakistan. It was effective for the month of March and comes under the monthly fuel adjustment mechanism.

Fuel adjustment charge is a system by which the price of electricity in Pakistan is adjusted as fuel prices fluctuate.

Fuel prices in Pakistan mimic global oil prices. And because electricity-producing companies in Pakistan import fuel, power sector regulator Nepra has to set the price of electricity according to fluctuations in fuel prices.

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