The power division has projected an additional fuel cost adjustment (FCA) of Rs2.56 per unit for electricity consumed in September. The adjustment is estimated to add Rs32.7 billion to consumers’ electricity bills in November.
The division said the adjustment would have been higher by around Rs3.44 per unit without targeted load management. It said the measures averted a potential Rs5-6 per unit increase despite rising international fuel prices and constraints on LNG supplies.
The September adjustment is expected to be Rs1.45 per unit higher than August’s FCA of Rs1.11 per unit. Over the past two months, the division has issued advance estimates before the Central Power Purchasing Agency (CPPA) makes its formal regulatory filing for monthly fuel cost adjustments.
According to the division, load management of two to two-and-a-half hours during September reduced reliance on costly alternative fuels, including furnace oil and high-speed diesel. Supplying imported re-gasified liquefied natural gas (RLNG) for power generation at domestic gas prices further reduced the burden by 83 paise per unit.
The division said international fuel prices rose sharply amid regional conflicts and supply chain disruptions following the closure of the Strait of Hormuz. Brent crude surged beyond $120 per barrel, against the benchmark of around $70 assumed in setting the base tariff. Despite Qatar’s declaration of force majeure, Pakistan continued to meet its RLNG requirements through contracted supplies and additional spot cargoes where necessary.
The division also stated that the combined impact of fuel price adjustments and quarterly tariff adjustments during January-August was limited to 65 paise per unit, an increase of 1.9pc over the base tariff. It attributed this partly to tariff rationalisation measures and an additional electricity consumption package for industrial and agricultural consumers, which it said encouraged greater use of grid power.
Industrial consumers have disputed the benefits of the package. They argue that the Rs22.96 per unit marginal cost rate benefits only a limited number of consumers, while the actual marginal cost of around Rs34 per unit adds a burden of about Rs11 per unit to the average tariff, affecting all consumers.
At their request, Nepra held a public hearing last week on revising or suspending the incremental package. A decision is awaited. The division said it continues to monitor international fuel markets and supply chains while taking measures to limit the impact of external price shocks on consumers.