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Saturday, June 8, 2024

Power generation down by 9.8 percent during Jul’22- AHL

On month-on-month (MoM) basis, fuel cost declined by 27.2 percent from 14.72/ kWh in June to PKR 10.71/kWh in July.

Power crisis have significantly affected the country as a whole, including business community and the households. There is an inverse relationship prevailing between the crisis and the resources which are leading the economy towards deterioration. According to Arif Habib Limited, power generation was down by 9.8 percent during Jul’22 in comparison to the same month in subsequent year.

Moreover, fuel cost rose by 65.6 percent on year-on-year (YoY) basis in the month of July 2022 from Rs. 6.47/KWh to Rs. 10.71/KWh in July 2021.

Read more: Energy crisis set to worsen

However, on month-on-month (MoM) basis, fuel cost declined by 27.2 percent from 14.72/ kWh in June to PKR 10.71/KWh in July.

According to the data, about 64 percent power generation came in July from cheaper domestic resources with static prices compared to a 51pc share in June. The share was 54pc in May, 50pc in April and 45pc in March.

Power companies seek additional Rs. 64bn next month

The power distribution companies (Discos) have sought an additional fuel cost adjustment (FCA) of Rs.4.69 per unit to generate about another Rs.64 billion in revenue on account of the higher cost of electricity consumed in July.

The tariff petition has been approved by the National Electric Power Regulatory Authority (Nepra) for a public hearing on August 31. The additional FCA asked by Discos, previously managed by Wapda, for July is about 53 percent lower than the record Rs.9.9 per unit demanded in June, owing to a significant increase in the share of cheaper domestic fuels, notably low-cost sources such as hydropower and nuclear power.

Energy sector plays a vital role in the economic development of a country. The recent decades witnessed a manifold increase in the demand for energy. The three principal drivers of increase in energy demand are the surge in economic activities, population growth and rapid technological transformation in the world.