ISLAMABAD: The National Electric Power Regulatory Authority has allowed a Rs1.01 per unit (about 10 per cent) increase in power tariff for all distribution companies of Wapda because of higher generation cost during December.

The decision was taken on Thursday at a hearing conducted by Nepra chairman Khawaja Mohammad Naeem under monthly fuel adjustment formula. The increased tariff will be charged in the billing month of February.

The increase will not be applicable to Wapda consumers using less than 50 units per month and the Karachi Electric Supply Company.

The Central Power Purchasing Agency had filed a petition for tariff increase on behalf of all distribution companies of Wapda.

The agency had told Nepra that reference fuel cost for December had been set at Rs7.86 per unit, but the actual generation cost stood at Rs8.87 per unit because of higher reliance on furnace oil and diesel, following diversion of natural gas to the industrial sector and lower availability of hydropower.

Therefore, it required a tariff increase of Rs1.01 per unit to meet its electricity purchase costs from independent power producers, Wapda’s thermal units and other sources.

Nepra expressed concern over higher transmission losses, but allowed whatever increase had been requested.

The regulator was informed that 6.70 billion units of electricity had been sold to consumers at a fuel cost of Rs59.44 billion. Electricity worth Rs280 million was lost to transmission network.

The Nepra chairman said the generation companies had to largely depend on expensive furnace oil and high speed diesel that resulted in higher generation cost, but it was helpful in containing loadshedding.

Under the fuel adjustment mechanism, the fuel cost of electricity is a pass through item in the overall tariff that is automatically transferred to consumers every month on the determination of Nepra.