Cheaper fuel prices: NEPRA approves tariff cut of Rs2.56 per unit

K-Electric, agricultural consumers will not get the Rs26b relief

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Friday announced a reduction of Rs2.56 per unit in electricity tariff for August 2016 in order to absorb the impact of cheaper fuel prices in the international market.

In the wake of the tariff cut, the consumers will get an overall relief of Rs26 billion in their electricity bills.

However, K-Electric and agricultural consumers as well as domestic users who consume less than 300 units of electricity per month will not be enjoying the tariff reduction.

Earlier, in a petition, the Central Power Purchasing Agency (CPPA) requested Nepra to slash power tariff by Rs2.50 per unit for the month of August. Responding to the request, Nepra decided to cut the tariff by Rs2.56 per unit in a public hearing conducted for the fuel price adjustment.

According to Nepra, the fuel cost of electricity supplied to distribution companies was estimated at Rs3.9562 per unit in August compared to the reference price of Rs6.4562 per unit, suggesting that the consumers were entitled to a price reduction of Rs2.50 per unit.

As the power distribution companies have recovered an extra Rs26 billion through electricity bills for August, the amount will be returned to the consumers after the regulator’s decision.

Total energy generated in the country from all sources stood at 10,780.21 gigawatt-hours (GWh) in August at a cost of Rs41.319 billion. The CPPA supplied 10,445.68 GWh to the distribution companies at the total price of Rs41.325 billion. Power companies, however, faced a net loss of 324.18 GWh, constituting 3.01% of the total energy supplied.

In August, hydroelectric power generation was recorded at 4,249.78 GWh, accounting for 39.42% of the total electricity produced in the country.

The electricity generated through furnace oil stood at 3,054.42 GWh (28.33%) whereas natural gas helped to produce 2,635.26 GWh (24.45%). The power generated with the help of furnace oil cost Rs7.79 per unit while gas-fired electricity cost Rs5.40 per unit.

Power companies generated 142.16 GWh (1.32%) by using high-speed diesel at a cost of Rs12.59 per unit. No electricity was produced through re-gasified liquefied natural gas.

Published in The Express Tribune, October 1^st, 2016.

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