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Power companies seek Rs1.20 per unit increase in fuel cost for consumers in August
Power companies have requested a Rs1.20 per unit fuel cost adjustment for August consumer bills, citing expensive imported fuels despite a majority of generation from domestic sources. Nepra has scheduled a public hearing and questioned sector performance, while the government signals another tariff package amid declining demand.
Power companies have formally requested a Rs1.20 per unit increase in fuel cost charges for consumer bills in August, a move that would add approximately Rs15.7 billion to electricity bills across the country, as reported by Dawn. The request, filed by the Central Power Purchasing Agency (CPPA) with the National Electric Power Regulatory Authority (Nepra), comes despite around 75% of electricity generated in June coming from cheaper domestic sources, predominantly those with zero fuel costs.
Coverage Comparison
The only outlet reporting on this story is Dawn, which covered the development in multiple articles. One report focuses on the fuel cost adjustment petition, detailing the reasons cited by CPPA for the increase, including higher prices of imported fuels. Another article highlights Nepra's critical stance on sector performance and the government's indication of a further tariff package.
Key Claims
Fuel Cost Adjustment Request: Power companies, through CPPA, have sought a Rs1.20 per unit increase in fuel cost charges for August, attributable primarily to the use of expensive imported fuels. Once approved by Nepra, this would result in an additional Rs15.7 billion collected from consumers via August bills.
Higher Fuel Costs: The request is driven largely by a near-doubling in the price of Regasified Liquefied Natural Gas (RLNG), which pushed its fuel cost to Rs35 per unit compared with Rs16 per unit in June last year. The CPPA stated that the reference fuel cost for June was set at Rs7.714 per unit, but the actual cost stood at Rs8.90 per unit, necessitating the additional charge.
Domestic Generation Mix: In June, around 75% of electricity came from domestic sources, including 39% from hydropower, 13.5% from nuclear, 10% from local coal, and 6.5% from local gas. Wind contributed 5%, solar 0.82%, and bagasse-based generation 0.35%.
Expensive Fuels Minimal Use: Furnace oil-based plants generated electricity at Rs52 per unit and diesel at about Rs57 per unit, but their combined contribution was less than 1% of the grid supply.
Declining Demand: Electricity consumption in June was about 5% lower than estimates and roughly 3.3% lower than the same month last year. Total units sold stood at 9.995 billion units compared with 10.337 billion units a year earlier. Barring a 2.8% growth in industry, reductions were seen across domestic and commercial sectors (3.5% to 5%) and agriculture and bulk consumers (12% to 29%).
Regulator's Criticisms: At a public hearing, Nepra questioned the performance of power sector entities and criticised excessive, revenue-based loadshedding. Nepra's Member Development Maqsood Anwar Khan expressed concern over protests against loadshedding while government companies reported declining demand. Concerns were also raised over outages at three nuclear power plants.
Government Tariff Package: The government indicated it was working on another power tariff package, as reported by Dawn.
Perspectives
Power Companies/CPPA: The Central Power Purchasing Agency, representing power companies, argued that the increase in fuel costs was primarily driven by the higher price of RLNG and the use of expensive spot-market purchases of LNG due to non-availability of contracted Qatari LNG. They cited actual fuel costs exceeding the reference cost.
Regulator (Nepra): The National Electric Power Regulatory Authority questioned sector performance and criticised excessive loadshedding despite declining demand, suggesting inefficiencies in generation and distribution. Concerns were raised about outages at nuclear plants and the use of expensive fuels.
Government: Representatives of the power division and its entities reported the decline in consumption and indicated work on another tariff package, without providing further details.
How this outlet told it
Dawn
Framing: Government seeking additional fuel cost from consumers — Critical
Facts Included:
Consumers may face Rs1.20 per unit additional fuel cost in August bills
Nepra questions performance of power sector entities
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Claim
Confidence
Status
ClaimPower companies are seeking a Rs1.20 per unit increase in fuel cost charges for consumers across the country in August.