In view of the fuel cost adjustment – accounts for the variation in fuel prices and generation mix – for the month of March, a petition has been submitted by the Central Power Processing Agency (CPPA) to increase the per-unit cost of electricity by Rs. 3.15. The National Electric Power Regulatory Authority (NEPRA) will decide upon the matter on the 27th of April. It is pertinent to mention that the price increase would not affect the prices of K-electric. Earlier, NEPRA, on the 15th, notified a fuel adjustment of Rs. 4.85 per unit to consumers of DISCOs – companies under Pakistan Electric Power Company (PEPCO) responsible for electricity distribution in their allocated areas. The companies buy electricity from PEPCO, WAPDA, and other Independent Power Producing companies and sell it to their own customer base.
The fuel adjustment sought an increase of almost 117 percent in their fuel cost adjustments for the electricity they sold in February. However, they were only granted an increase of Rs. 4.85 per unit, which allowed them to mop additional funds valued at around Rs. 37.7 billion.
Currently, the per-unit price of electricity for a household that consumes less than 50 units stands at Rs. 2 per kWh. If the units exceed 100 then the price ramps up to Rs. 9.6 per kWh and above 700 units, the price of a unit of electricity costs Rs. 23.9 per kWh.
Before this, the National Electric Power Regulatory Authority repeatedly urged major reforms to increase the outcome of the DISCOs. NEPRA emphasized that despite regular instructions and monitoring, DISCOs did not show distinguishable performance change. NEPRA also noted all the pending applications for new connections and tasked the DISCOs to fulfill their obligation under the rules.
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The new government is also expected to increase the prices of petroleum products. On Saturday, Miftah Ismail, took to Twitter to announce that the government might have to retract its recent decision in which it rejected the Oil and Gas Regulatory Authority’s summary to increase the price of petroleum products. Miftah wrote on Twitter that the “decision announced last night” to continue with the prevalent subsidies “was a tough one and will have to be revisited.”
As this happens, the cost of electricity from furnace oil-based power plants is likely to go up.