Karachi, 31 August 2022: NEPRA conducted a public hearing on 31 August over the petition for negative Fuel Charge Adjustments at the rate of PKR 3.47 per unit submitted by K-Electric for July 2022. After NEPRA’s approval, consumers may receive a benefit of 3.47 rupees per unit for consumption in July 2022.
Compared to the month of June, July’s FCA is lower primarily due to a reduction in global fuel prices. The price of power purchased from CPPA-G in July 2022 decreased by 31% as compared with June 2022 while the price of RLNG decreased by 16%. In the same period, furnace oil prices increased by 4%.
FCAs are applied after NEPRA’s scrutiny & public hearings, which are conducted independently for KE and state-owned entities (XWDISCOs). Together with the final approval on the benefit to be passed on to consumers, the NEPRA Authority will also specify the period during which it will be applied to consumer bills.
KE also requested for an increase of PKR 14.53 per unit on account of Quarterly Tariff Adjustments (QTA) for the period April to June 2022. Under the uniform tariff policy applicable across the country, these costs are usually not passed to consumer bills. However, the final decision is made by the Government of Pakistan.
Across Pakistan, the determination of electricity tariffs, FCA and QA amounts, and the months in which these amounts are to be recovered from consumers in electricity bills is conducted in under the prevailing laws and regulations of the power sector governed by NEPRA Authority and the Federal Government.
K-Electric (KE) is a public listed company incorporated in Pakistan in 1913 as KESC. Privatized in 2005 KE is the only vertically integrated utility in Pakistan supplying electricity within a 6500 square kilometer territory including Karachi and its adjoining areas. The majority shares (66.4%) of the company are listed in the PSX owned by KES Power, a consortium of investors including Aljomaih Power Limited of Saudi Arabia, National Industries Group (Holding), Kuwait, and the Infrastructure and Growth Capital Fund (IGCF). The Government of Pakistan.