Govt Likely to Increase Power Tariff in December 2024

The government will most likely notify an effective increase of 26 paise per unit in December power tariffs due to the negative fuel cost adjustment (FCA) of Rs. 1.28 per unit. The Central Power Purchasing Agency (CPPA) had sought a Rs. 1.02 per unit negative FCA for October bills. However, with the current negative FCA of Rs. 1.28 per unit set to expire in November, the December bills would likely include a tariff increase of 26 paisas per unit. If approved, the adjustment will be reflected in December bills but will not apply to domestic users consuming up to 300 units per month. Monthly FCAs account for fuel variations, while other costs are added to the quarterly base tariffs set by the federal government. During a public hearing, CPPA representatives highlighted that October’s power supply was marginally above reference fuel costs by at least 6.8 percent. In October, over 71 percent of electricity was generated from domestic fuels. Hydropower contributed 31 percent of the total supply, while LNG-based power accounted for 19.5 percent, and local coal for 14.8 percent. The costliest electricity came from furnace oil at Rs. 29.14 per unit; nuclear energy remained the cheapest at Rs. 1.51 per unit. Electricity consumption reached 9.98 billion units in October, but fuel costs in October fell 19 percent compared to the same month last year.