NEPRA has granted approval to charge Fuel Cost Adjustment (FCA) of Rs1.46 per unit in the electricity bills for September

Amidst widespread protests against the surging electricity bills, the National Electric Power Regulatory Authority (NEPRA) granted approval on Friday for power distribution companies to impose a charge of Rs1.46 per unit on consumers for fuel cost adjustment (FCA) in July’s electricity bills.

The regulatory decision was made in accordance with Section 31(7) of the Regulation of Generation, Transmission, and Distribution of Electric Power Act, 1997, as amended by the Regulation of Generation, Transmission, and Distribution of Electric Power (Amendment) Act 2011.

The FCA will be applicable to all consumer categories except Electric Vehicle Charging Stations (EVCS) and lifeline consumers. NEPRA specified that this adjustment should be clearly displayed as a separate item on consumers’ bills, calculated based on the units consumed in July 2023. The adjustment will be reflected in the September 2023 billing cycle.

Last week, NEPRA had emphasized that the costly imported coal inventory held by coal-based power plants, particularly the Sahiwal coal power plant, coupled with infrastructure limitations like the HVDC transmission line’s inability to fully transmit cost-effective power from southern generators, was placing a substantial financial burden on electricity consumers.

This latest increase in power tariffs adds to the existing challenges faced by consumers, including record inflation and high fuel and electricity prices. Nationwide protests have erupted due to the surge in electricity bills, and consumers are expected to bear a cumulative burden of Rs24.76 billion in their September 2023 bills, given the sale of over 14 billion units in July.

In response to ongoing protests by citizens and traders against the steep hikes in power bills and additional taxes, the interim government led by Prime Minister Anwaar-ul-Haq Kakar in Islamabad has been working to persuade the International Monetary Fund (IMF) to provide immediate relief to electricity consumers in the financially strained country. However, it’s important to note that Pakistan is under an IMF program, and any relief or subsidy is contingent upon IMF approval.

Both sides have engaged in intense negotiations, while protests have continued on the streets against inflated power bills. Recent reports indicate that the IMF has approved a relief proposal for consumers using up to 200 units, allowing authorities to collect electricity bills in installments, pending final approval from the federal cabinet. This initiative could provide temporary relief to approximately 4 million electricity consumers.

Nevertheless, the Fund rejected the interim government’s plan to provide relief to those consuming up to 400 units of electricity per month, a proposal that could have benefited 32 million consumers. The IMF emphasized the need to combat electricity and gas theft and improve revenue recovery. Additionally, the IMF demanded a 45 to 50% increase in gas tariffs from July 1, contingent upon federal cabinet approval.

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