Last-Minute Hit: Caretaker Government Jolts Electricity Prices with a Surge of Rs. 7.05

In an overnight decision, the National Electric Power Regulatory Authority (NEPRA) has greenlit a significant Rs. 7.05 surge in fuel cost adjustment (FCA) to be enforced in March 2024 billing cycles, bowing to intense pressure from the caretaker government. This adjustment will impact consumers of ex-WAPDA distribution companies (DISCOs) for electricity consumed in January 2024.

The escalation in electricity prices will impose an extra burden of Rs. 55 billion on consumers.

NEPRA’s move comes on the heels of DISCOs’ prior demand for an FCA adjustment of Rs. 7.13 per unit. Initially, the regulator had refrained from making a decision pending an investigation.

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However, the caretaker government exerted strong pressure on NEPRA to proceed with the surcharge without awaiting the investigation results, risking performance benchmarks committed to the International Monetary Fund. NEPRA relented, postponing the probe until after Ramazan but announcing the FCA revision late on Monday.

The Rs. 7.05/kWh adjustment will be applicable to all consumer categories except Electric Vehicle Charging Stations (EVCS) and Lifeline consumers. It will be displayed separately on consumers’ bills based on units billed in January 2024. The ex-WAPDA distribution companies (DISCOs) will incorporate the fuel charge adjustment for January 2024 in the March 2024 billing cycle. This adjustment marks the highest FCA rate ever imposed, approximately 96 percent higher than the pre-fixed fuel cost already charged in January bills.

This compounds the already burdensome power bills, which have seen about a 26 percent increase in the annual base tariff and substantial quarterly tariff adjustments.

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