NEPRA mulls Rs14.37b fuel cost hike

ISLAMABAD:

The National Electric Power Regulatory Authority (NEPRA) is considering a fuel price adjustment that could add Rs14.37 billion to consumers' electricity bills for February, prompting industry concerns over rising production costs.

NEPRA, chaired by Wasim Mukhtar, heard arguments on Tuesday from the Central Power Purchasing Agency (CPPA), which sought a fuel price adjustment of Rs1.64 per unit for February. During the month, 7.43 billion units of electricity were sold across the country. The base adjustment stands at Rs12.18 billion, but with General Sales Tax, the total impact rises to Rs14.37 billion, CPPA officials told the authority.

Industry representatives raised concerns during the hearing. Manufacturer Aamir Sheikh questioned whether March's fuel price adjustment could reach Rs10 per unit and warned that sustained increases could lead to factory closures.

"If the fuel price adjustment is really this high, we might as well shut the factories down," he said. CPPA Managing Director Rehan Akhtar acknowledged the pressure, attributing it to global fuel price movements. He said higher fuel costs were being passed on to consumers. NEPRA cited a gap between the reference fuel cost of Rs6.73 per unit and the actual cost of Rs8.37 per unit for February, a shortfall of nearly 25%. The adjustment would also apply to K-Electric consumers.