High fuel cost in Jan 2022: Power tariff likely to go up by Rs6.1/unit

ISLAMABAD/LAHORE: The costly imported fuel is pushing the government to pass on its full impact to the power consumers. The Central Power Purchasing Agency (CPPA), on behalf of the power distribution companies (Discos), has once again approached the National Electric Power Regulatory Authority (Nepra) to allow the companies collect Rs6.10/unit additional from the power consumers in their electricity bills of April 2022, as they paid less than an actual cost of power generation in the month of January 2022.

According to the previous data, this is the highest-ever demand for increase. Although it will be a one-time payment, it will disturb the household budgets of millions of families.

The CPPA has asked the authority for the monthly fuel cost adjustment (FCA) as it said that the fuel cost -- oil and RLNG -- were much higher than what was charged from consumers. The total impact of the increase will be translated into additional collection of around Rs60 billion.

Nepra has decided to hold a public hearing on the matter on Feb 28, 2022.

In its petition, the CPPA pleaded that it had charged consumers a reference tariff of Rs6.5124 per unit in January 2022, while actual fuel cost turned out to be more than the amount charged and hence it should be allowed to increase the rate by Rs6.10 per unit.

According to the petition, the total energy generated in January was 8,797 GWh at a total price of Rs107.5 billion, which is Rs12.2199 per unit. Of the total, the net electricity delivered to Discos was 8420.73 GWh with transmission losses of 330.85 GWh.

According to the data provided to Nepra, the most expensive sources of energy generation including high speed diesel (HSD) and residual fuel oil (RFO) were consumed more than previous months, which also jacked up the total cost of generation, while the least expensive (renewable) share reduced drastically during the month. Interestingly, the share of RLNG-based power also reduced sizably.

The highest share of energy source in the total pie was of coal. Power generated from coal was 2,916.7 GWh (or 33.15pc) with a cost of Rs14.1049/unit. Its cost was also much higher due to price-hike in international market. It was followed by local natural gas and nuclear sources with 14.37 per cent (1264 GWh) each, while the gas charges were Rs7.747/unit and nuclear was Rs1.075/unit.

Furnace-based electricity was generated of around 1238.11 GWh (14.07pc) with a unit cost of Rs22.807. The energy generated from imported RLNG was 626 GWhs or 7.12 per cent of total generation with cost of Rs16.703/unit. HSD-based energy was generated of 592 GWh costing Rs25.98/unit. Interestingly, due to normal water shortage in dams in winter, the share of hydropower generation was only 512.94 GWhs or 5.83 per cent in January.

From Iran, 31.65 GWh or 0.36 per cent electricity was imported at the cost of Rs15.007 per unit. From wind and solar, 194.88 GWh and 46.58 GWh electricity was generated, respectively. From Baggasse, 107.13 GWh or 1.22 per cent electricity was generated at the cost of Rs5.98 per unit.

It is to be noted that for the last several months, the regulator has been allowing the DISCOs to collect additional amount from power consumers, the reason being high cost of imported fuel for power generation.

Meanwhile, Pakistan Muslim League Nawaz (PMLN) President and National Assembly Opposition Leader Shehbaz Sharif has slammed the government over Rs6 per unit electricity tariff hike, and demanded immediate reversal of the increase.

In a statement issued here on Saturday, Shehbaz said raising the already unbearable electricity tariffs was totally unacceptable. Imran Niazi should not invoke wrath of God further as people have been cursing him due to immense financial crisis, he said.

The PMLN president said that the brutal hike in petrol prices had increased the prices of everything exponentially, including flour and sugar. “The increase of Rs4 per litre in the petrol development levy on top of Rs12 per litre was another injustice to people. The government legislates in the interest of the IMF, but makes lame excuses of not having two-thirds majority when it comes to providing relief to people. Imran Niazi only knows how to give relief to his ministers and to his allies, but not to people,” he said.

The opposition leader said the crude oil and oil import bill had reached a record high of $11.7 billion in the first seven months of the current financial year. He termed the sharp rise of 125% in energy imports a cause for serious concern. He said the business community was upset and people were helpless, but Niazi and his government were in state of complete denial.

“The Imran Niazi government knows only how to increase petrol prices when oil prices go up in international market, but it turns a blind eye when the prices decrease in the world markets. People of Pakistan have been suffering for the past four years and the Niazi-led government has been busy making lame excuses and minting money through corruption.

“The government has neither an intention nor the capacity to provide relief to people. Only by getting rid of it the nation would get some relief. The country and the people have gone bankrupt and the income of the rulers has increased,” Shehbaz added.

Instead of controlling inflation, Imran was obsessed with controlling opponents and critics, which is unfortunate. He promised that the PMLN would fulfil its promise of ousting the tyrannical Niazi regime.