By Staff Reporter
ISLAMABAD: Pakistan’s power regulator approved a fuel-cost surcharge of 1.11 rupees per kilowatt-hour on October electricity bills, adding about 16 billion rupees to what consumers pay after spot LNG purchases, imported coal and weaker hydro and nuclear output pushed up August generation costs.
The National Electric Power Regulatory Authority said in a notification on Thursday that the positive fuel cost adjustment for August, set at 1.1086 rupees per kilowatt-hour, applies to all consumer categories of K-Electric Ltd. and the ex-Wapda distribution companies. Lifeline consumers, electric-vehicle charging stations and prepaid customers on the prepaid tariff are exempt. Households and businesses on the incremental consumption package are covered.
The Central Power Purchasing Agency had asked for more. It reported an actual average fuel charge of 8.8265 rupees per kilowatt-hour for August, against a reference component of 7.0998 rupees in the notified consumer-end tariff, and sought an extra 1.73 rupees per unit. After adjustments, Nepra put the actual fuel component at 8.2084 rupees and allowed 1.11 rupees.
The increase is more than triple the 0.3364 rupees per unit that Nepra approved for May, which was reflected in July billing.
August’s fuel bill climbed because the generation mix shifted toward expensive sources. Nepra’s notification cited costly regasified LNG bought on the spot market, because contracted supplies from Qatar remained under force majeure. It also pointed to heavier coal imports and lower-than-expected output from cheaper hydropower and nuclear plants.
QatarEnergy declared force majeure on March 4 after an attack on its Ras Laffan LNG export complex, and the declaration was later extended through August. Pakistan’s petroleum minister said in July that he expected contracted cargoes to resume in September if the restrictions were lifted.
Hydropower, which has no fuel cost, was budgeted to supply about 41% of generation but delivered slightly less than 38%. Nuclear was projected at 16.4% and came in at 10% because of an outage at the Karachi nuclear plants. Imported coal filled the gap, accounting for 15.6% of generation against a planned 7.4%.
Lower utilization also raised the average cost of nuclear fuel, to 3.15 rupees per unit from an estimated 2.50 rupees. Imported coal-fired generation cost 17 rupees per unit, while local coal came in at 5.50 rupees. RLNG-based generation was the most expensive at 45.93 rupees per unit, above the 45.25 rupees for furnace oil, a figure that includes a petroleum levy of 73,000 rupees per tonne.
Distribution companies and K-Electric must reflect the August adjustment in October billing, based on units consumed and billed in August, and show it as a separate line item. Where October bills went out before the notification, the amount may be recovered in the following month, Nepra said.
Nepra extended the same adjustment to K-Electric customers in line with federal government guidelines on uniform fuel charge adjustments. It also directed the utilities to comply with court orders in applying it.
The fuel charge is reviewed monthly and usually applies for one month only. Under the tariff mechanism, fuel cost changes pass to consumers automatically each month. Quarterly adjustments for power purchase prices, capacity charges, variable operation and maintenance costs and use-of-system charges, including the effect of transmission and distribution losses, are built into the base tariff by the federal government.
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