ISLAMABAD: Amid inflation already rising at the highest rate in half a century at 36.4 per cent, one of the key contributory factor — the electricity costs — continue to sustain spiking trend as ex-Wapda Distribution Companies (Discos) and K-Electric seek regulatory clearance to extract over Rs50 billion more from their consumers in the sizzling month of June.

In their separate tariff petitions, Discos have sought to charge Rs19.6bn in fuel cost adjustment (FCA) in June while KE to extract about Rs30.5bn in three coming months both under quarterly tariff adjustment (QTA) for January to March and FCA for April. The National Electric Power Regulatory Authority (Nepra) has accepted the respective tariff petitions and called public hearings on May 31 to see if the proposed increase in tariff is justified in line with monthly FCA and quarterly mechanisms.

If approved, Discos would charge an additional amount of about Rs19.6bn from their consumers for electricity consumed in April at an additional FCA of about Rs2.01 per unit despite a 54pc power generation from domestic cheaper fuels. On the other hand, the KE would be able to charge 49 paise per unit additional cost to consumers to mop up about Rs747 million under FCA in June on top of Rs5.17 per unit over the next three months with a total financial gain of Rs30.5bn under QTA for the period January-March.

The increase in FCA is despite the fact that the base average tariff has gone up by more than Rs7 per unit and a reduction in the cost of import fuels like furnace oil and liquefied natural gas.

One of the key reasons behind the FCA is a drop in hy­­dropower generation and the resultant increa­­se in the share of imp­o­r­ted LNG-based generation in the overall power supply — making it the highest contributor at 24pc.

Published in Dawn, May 20th, 2023