Consumers of K-Electric (KE) are likely to face an increase of Rs4.49 per unit in power tariff on account of fuel charges adjustment for March 2023.
KE has submitted a petition to the National Electric Power Regulatory Authority (Nepra), seeking a significant increase in electricity tariffs in the wake of higher prices of fuel used for power generation in March.
Nepra has announced that the hearing on KE’s petition will be held on May 3. Fuel cost adjustment is sought by power utilities owing to variation in global prices of fuel consumed for generating electricity and due to the change in generation mix.
This cost is passed on to consumers following scrutiny and approval by Nepra and is usually applied to only one month’s electricity bills. Consumers also receive some benefit when the cost of fuel decreases. KE’s petition for March fuel charges adjustment of Rs4.49 per unit came primarily due to increase in prices of re-gasified liquefied natural gas (RLNG) and rise in cost of electricity supplied by Central Power Purchasing Agency-Guarantee (CPPA-G).
The price of electricity purchased from CPPA-G in March 2023 went up by 41% as compared with December 2022.
KE is drawing around 1,000 megawatts of electricity from CPPA-G and any fluctuation in its prices impacts the power tariff for consumers in Karachi.
KE also buys gas from Sui Southern Gas Company to generate electricity at its own plants. The price of RLNG purchased from SSGC rose by 14% in March as compared to December 2022.
KE procures RLNG from Pakistan LNG Limited as well in line with a contract. The RLNG supplied by PLL got expensive by 20%.
However, the price of furnace oil decreased by 10% in March against December 2022 levels. Furnace oil is also used in power plants for electricity production.
In a statement, KE said that the responsibility of determining fuel charges adjustment and any other costs to be recovered from consumers “rests with Nepra and the government, and it follows the prevailing rules.”
Published in The Express Tribune, April 21st, 2023.
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