By Staff Reporter
ISLAMABAD: The power regulator has approved a hike in electricity tariffs for February 2024, passing on the higher fuel costs incurred in December 2023 to consumers.
The National Electric Power Regulatory Authority (NEPRA) said it had allowed state-run power distribution companies (Discos) to charge an additional Rs4.567 per unit on top of the existing tariffs.
The decision, which will affect all consumer categories except lifeline and electric vehicle charging stations, is expected to add a financial burden of nearly Rs40 billion on consumers, including 18 percent general sales tax.
NEPRA said the tariff increase was necessary to adjust the fuel costs for December 2023, when the actual fuel cost was Rs11.0225 per unit, much higher than the reference fuel cost of Rs5.4031 per unit.
The regulator said the higher fuel cost was mainly due to the increased reliance on expensive imported coal and furnace oil for power generation, as well as the depreciation of the rupee against the U.S. dollar.
According to data submitted by the central power purchasing agency (CPPA), which represents Discos, power generation in December 2023 cost Rs78.3 billion, or Rs10.134 per unit, while the power delivered to Discos cost Rs81.767 billion, or Rs11.0225 per unit, after accounting for 3.51 percent transmission losses.
The power generation in December 2023 decreased by 8.21 percent year-on-year but increased by 2.37 percent month-on-month. The generation cost per unit increased by 44 percent year-on-year and 41.3 percent month-on-month.
The per-unit cost of power generation from imported coal rose by 18.7 percent to Rs17.2525 in December 2023 from Rs14.5305 in November 2023, while the cost of local coal generation remained unchanged at Rs12.3307.
The cost of nuclear power generation increased by 9.03 percent to Rs1.316 per unit in December 2023 from the previous month, and by 22.7 percent from the same month of the previous year.
Generation from nuclear sources fell by 36 percent year-on-year and 6.9 percent month-on-month to 1,464 GWh in December 2023.
The power generation from local coal increased by 24.6 percent to 1,310 GWh, while the generation from imported coal decreased by 21 percent to 384 GWh in December 2023 compared to the previous month.
The government produced less electricity from renewable and cost-effective sources such as hydropower, wind, and solar in December 2023, the data showed.
The tariff hike for February 2024 comes after NEPRA increased the electricity tariff by Rs5.63 per unit on January 31, putting an additional burden of Rs49 billion on consumers for January 2024.
The power consumers in Pakistan have been facing frequent tariff increases due to rising fuel costs, inefficient power sector, and circular debt.
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