ISLAMABAD, March 28: The National Electric Power Regulatory Authority (Nepra) on Thursday allowed 12 corporate companies of Wapda to increase electricity rates by 5.5 paisa per unit for domestic consumers under automatic fuel adjustment mechanism.

The tariff for consumers using more than 1,000 units per month has not been increased because they are already paying higher rates.

Similarly, rates for electricity consumers in Karachi would remain unchanged as a windfall of previous review along with lifeline consumers using less than 50 units per month.

The latest increase has come just three weeks after the notification of an average 9 paisa and 13 paisa per unit tariff reduction for Wapda and KESC consumers respectively whose bill collection has yet to be made by the two utilities.

The federal government had tactically delayed notification about tariff reduction determination announced by Nepra in December last to provide windfall benefit of higher rates to the power utilities. “Since the increase in tariff is in the utility’s favour, the government is expected to notify it immediately,” said a senior official of the water and power ministry.

Mansoor Elahi, member Nepra, explained to Dawn that average increase for consumers amounted to 4.5 paisa per unit because consumers using more than 1,000 units and those using less than 50 units besides public lighting would remain unaffected. In this way, the fresh tariff revision resulted in approximately 1.2 per cent increase when compared with existing average sale rate.

He said automatic tariff adjustment mechanism has been suspended for one quarter for the KESC consumers because full rationalisation of tariff would have interrupted power supply.

He explained that under the previous review, full impact of fuel price was not passed on to the consumers and hence the same rate would continue till next review in June. Mr Elahi explained that the KESC had informed that it would not be in a position to buy fuel on the basis of existing base rates.

In the case of KESC, as the utility has submitted a petition for adjustment of base tariff, the Nepra has decided to defer implementation of fuel adjustment till a decision is made on that petition, a Nepra announcement said.

The Nepra announcement said that the present adjustment took into consideration variation in price of furnace oil that increased annual fuel bill of Wapda companies in the previous quarterly adjustment.

The furnace oil prices excluding general sales tax which stood at Rs8,110 per ton on Jan 1, 2002, decreased to Rs8,022 per ton on Jan 16 and declined further to Rs7,898 per ton on Feb 1, 2002. On Feb 16, furnace oil prices increased to Rs8,058 and then to Rs8,229 per ton on March 1, 2002, a price level where tariff reduction was calculated on Dec 28, 2001. The fuel price increased to Rs8,555 per ton on March 16, 2002.

The Nepra contended that the net effect on account of fuel price variation had increased the estimated fuel bill of Wapda companies for the year 2001 and 2002 from Rs72.61 billion to Rs73.89 billion after incorporating the actual generation up to October 2001.

The increase in annual fuel cost amounted to Rs1.28 billion. An amount of Rs0.71 billion was adjusted for delayed implementation of earlier automatic fuel-based tariff determination. The remaining portion of Rs0.57 billion was met through an average 4.5 paisa per unit increase in average sale rate. However, after excluding consumers of more than 1,000 units and less than 50 units per month and public lighting, total increase for remaining consumers amounted to 5.5 paisa per unit.