Govt Seeks Rs. 2.94 Per Unit Tariff Increase In May Bills

The government wants permission from NEPRA to add Rs. 2.94 extra per unit in May electricity bills.

This increase is almost 46% more than the fuel cost set for March, which was Rs. 6.44 per unit. NEPRA will decide about this after a public hearing on April 26.

In recent months, there have been extra charges ranging from 50% to 115% higher than what was initially decided for fuel costs in the beginning of FY24.

This extra charge is added on top of a 26% increase in the yearly base tariff and a 10% increase in the quarterly tariff adjustment.

The higher fuel cost for March is mainly because of the rise in prices of domestic coal and gas, even though there was no use of imported fuels like coal, diesel, and furnace oil. LNG stayed cheaper, and the exchange rate stayed steady.

According to CPPA, the actual fuel cost for March was Rs. 9.38 per unit, compared to the set fuel cost of Rs. 6.44 per unit.

Power generation decreased by 8.2% in March 2024 compared to March 2023, and by 1.2% in the first nine months of FY24 compared to the same period in FY23.

In March 2024, actual power generation was 10.4% lower than the expected generation. Arif Habib Limited expects this decrease in generation to lead to higher capacity charges for the 4th quarter of FY24.