On June 14, NEPRA conducted a public hearing over the petition submitted by K-Electric on Fuel Charges Adjustments (FCA) for April 2022 and Quarterly Adjustments for January to March 2022.
KE had requested an increase of PKR 5.30 in power tariff on account of FCA for April. On the other hand, KE had requested an increase of PKR 3.89 rupees on account of Quarterly Adjustments. According to the spokesperson of the power utility, the Impact of quarterly adjustments is usually not passed to consumers under the uniform tariff policy applicable across the country.
The major Impact on the monthly Fuel cost adjustment of April 2022 was due to an increase in the fuel price increase of Furnace Oil, RLNG, and CPPA-G. Between March 2022 and April 2022, the price of Furnace Oil and RLNG increased by 22%, while the power purchase price from CPPA-G increased by 17%. Per applicable tariff across the country, fuel adjustment is reviewed every month and is applicable on consumer bills for only one particular month.
As per KE’s spokesperson, FCA is incurred by utilities due to global variation in fuel prices used to generate electricity and change in the generation mix. Consumers also receive a benefit when the cost of fuel decreases. Furthermore, These charges are applied after NEPRA’s scrutiny & public hearings, which are conducted independently for KE and state-owned entities (XWDISCOs). Alongside final approval on the cost to be charged to consumers, NEPRA also specifies the period during which these costs can be applied to consumer bills.