NEPRA announces Rs4.35 per unit tariff cut

Decision accommodates dip in global oil prices in February, March

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has decided to cut electricity tariff by Rs4.35 per unit for the months of February and March in order to adjust for cheaper fuel prices in the international market.

According to the power regulatory body, consumers will witness the fuel price adjustment reflected in their power bills next month. The reduction is expected to provide them with a relief worth around Rs32 billion.

Nepra decided to reduce tariff by Rs2.15 per unit on account of fuel price adjustment for February and Rs2.20 per unit for March. However, agricultural and K-Electric consumers, along with domestic households which consumed less than 300 units a month, will not get this relief.

In its petition, the Central Power Purchasing Agency (CPPA) had asked Nepra to reduce the tariff, stating that the actual generation cost was lower in both months due to a dip in global crude oil prices.



Therefore, it argued that the extra money collected from consumers needed to be refunded through adjustment in the next billing cycle.

Reference prices for the months of February and March were Rs7.2603 and Rs8.0985 per unit against actual prices of Rs4.8624 and Rs5.8948 per unit respectively.

In February, the CPPA reported that almost 23.4% of electricity generated came through hydroelectric power plants, 26.28% by furnace oil-based plants, 28.15% through gas-run plants and 0.09% through diesel-based plants.

In March, 16.85% of power was produced through hydel resources, 0.5% through diesel, 32.75% through furnace oil and 29.12% through gas.



The total amount of power generated stood at 6,382.77 gigawatt-hours (GWh) in February costing Rs29.2 billion and 7,619.86 GWh in March costing Rs42.2 billion.

However, 6,223 GWh was supplied to power distribution companies in February and 7,400.19 GWh in March.

The CPPA added that the transmission and distribution losses stood at 2.36% in February and 2.76% in March, which were higher compared to the benchmark set by the regulator.

Power production and supply has not been satisfactory in Pakistan for years as consumers have been facing hours-long outages, particularly in summer. With the rise in temperature this year too, the gap between demand and supply of electricity has widened, resulting in up to 12 hours of power cuts in a day.

Irked by the prolonged outages that have put the government in an embarrassing position, Prime Minister Nawaz Sharif has directed the Ministry of Water and Power to fix responsibility for presenting misleading figures regarding electricity demand and supply during the current summer.



He has also told the ministry to take immediate measures for the resolution of tariff issues and to ensure minimum load-shedding during upcoming Ramazan.

Meanwhile, the Ministry of Water and Power is planning to burden honest consumers with the annual cost of power theft amounting to Rs82 billion. It is mulling over the option of taking Nepra to court if it refuses to give its nod to the plan.

Talking to The Express Tribune, a senior ministry official revealed that they would take up with Nepra the proposal of quarterly tariff adjustment in line with actual line losses and bill recoveries. "The ministry is also considering moving court in case Nepra does not come up with a positive response," he said.

Earlier, the government did not pass on the full relief of the plunge in crude oil prices to power consumers with the imposition of financial and tariff rationalisation surcharges amounting to over Rs100 billion per year.