Karachiites to pay additional Rs. 3.93/unit in May as NEPRA approves fuel charges adjustment for March

ISLAMABAD: Power consumers of K-Electric will have to bear an additional cost of Rs. 3.93 per unit for the month of March 2023 as the National Electric Power Regulatory Authority (NEPRA) has approved and notified the fuel charges adjustment (FCA).

According to NEPRA’s notification, the increase in electricity tariff will be applicable to all consumer categories except Electric Vehicles Charging Stations (EVCS) and lifeline consumers of KE. NEPRA has instructed K-Electric to reflect the fuel charges for March 2023 in the billing month of May 2023.

This increase in electricity tariff shall be shown separately in the consumer’s bills on the basis of units billed to the consumers in the respective month to which the adjustment pertains, said NEPRA notification.

K-Electric shall reflect the fuel charges in respect of March 2023, in the billing month of May 2023, added NEPRA notification.

“While effecting the Fuel Adjustment Charges, K-Electric Ltd. shall keep in view and strictly comply with the orders of the court notwithstanding this order, reads NEPRA notification.   

KE had earlier filed a petition seeking an FCA of Rs. 4.49/unit for March 2023. However, NEPRA approved a lower increase of Rs. 3.93/unit due to the higher prices of fuel used for power generation in March. The cost of fuel adjustment is usually passed on to consumers following scrutiny and approval by NEPRA, and it is applied to only one month’s electricity bills.

K-Electric draws around 1,000 megawatts of electricity from Central Power Purchasing Agency-Guarantee (CPPA-G), and any fluctuation in its prices impacts the power tariff for consumers in Karachi. The price of electricity purchased from CPPA-G in March 2023 went up by 41% compared to December 2022. KE also buys gas from Sui Southern Gas Company and RLNG from Pakistan LNG Limited to generate electricity at its own plants. The price of RLNG purchased from SSGC rose by 14% in March compared to December 2022, while the RLNG supplied by PLL increased by 20%.

In contrast, the price of furnace oil, which is also used in power plants for electricity production, decreased by 10% in March compared to December 2022 levels. The responsibility of determining fuel charges adjustment and any other costs to be recovered from consumers rests with NEPRA and the government.

Consumers will receive the benefit of reduced fuel charges if the cost of fuel decreases in the future. The increase in the electricity tariff due to the FCA for March 2023 will be shown separately in the consumer’s bills based on units billed in the respective month.