Govt Seeks Rs. 2.94 Per Unit Tariff Increase In May Bills

The government is seeking approval from the National Electric Power Regulatory Authority (NEPRA) to impose an additional Rs. 2.94 per unit in fuel cost adjustments (FCAs) in May bills. The proposed increase in FCA is nearly 46 percent higher than the fuel cost of Rs. 6.44 per unit set for March. NEPRA will hold a public hearing on April 26 to make a decision in this regard, reported a national daily. Recent months have seen additional FCAs 50-115 percent higher than initially determined fuel costs notified in th beginning of FY24. This additional charge comes on top of a 26 percent increase in the annual base tariff and a 10 percent hike under the quarterly tariff adjustment. The higher FCA for March is primarily attributed to increased prices of domestic coal and gas, despite no usage of imported fuels like coal, diesel, and furnace oil. LNG remained relatively cheaper, and the exchange rate remained stable. According to the CPPA’s petition, the actual fuel cost for March was Rs. 9.38 per unit, compared to the reference fuel cost of Rs. 6.44 per unit. It is pertinent to mention that power generation went down by 8.2 percent YoY to 8,023 GWh (10,784 MW) during March 2024, compared to 8,741, GWh (11,749 MW percent. In 9MFY24, power generation decreased by 1.2 percent YoY to 92,450 GWh (14,008 MW) compared to 93,582 GWh (14,231 MW) during 9MFY23. During March 2024, the actual power generation was 10.4% lower than the reference generation. According to Arif Habib Limited, this decline in generation is expected to result in higher capacity charges for the 4QFY24 QTA.