ISLAMABAD: Citizens are likely to see an increase of Rs6.10 per unit in their March electricity bills, as the country paid a high price for producing power from furnace oil and diesel in January.

In an application, the Central Power Purchasing Agency (CPPA) has informed the power sector regulator that the net cost of electricity production was Rs12.61 per unit during the month.

The reference fuel charges set by the National Electric Power Regulatory Authority (Nepra) stand at Rs6.51 per unit, or kilowatt hour. The CPPA has sought an increase of Rs6.10 per unit on account of Fuel Charges Adjustment (FCA) for January.

Nepra has called a public hearing on the matter on Feb 28, inviting all entities concerned and citizens to present their points of view regarding the demand made by the CPPA. However, the CPPA’s demands regarding fuel price adjustments are generally accepted by the regulator.

CPPA says high cost of electricity generated from HSD and furnace oil necessitates hike

The application filed by the CPPA has pointed out that the cost of electricity generated from high-speed diesel (HSD) was the highest (Rs25.98 per unit), followed by power produced using furnace oil (Rs22.80 per unit).

Incidentally, only six per cent of total electricity produced in the country was generated using HSD but its high cost served to enhance the net basket price. Just over 14pc of electricity was produced from furnace oil.

In contrast, the cost of power produced using coal was lower (Rs14.10 per unit). Coal-based plants accounted for more than 33pc of the total generation.

The cost of power using natural gas and re-gasified liquefied natural gas (RLNG) was Rs7.74 and Rs16.70 per unit, contributing 14.37pc and 7.12pc of the total electricity generated, respectively.

The cheapest source of electricity was the nuclear power plants (Rs1.07 per unit) and their contribution to the total generation was 14.37pc.

The CPPA has also informed Nepra that there was (almost) no power generation from hydel, wind and solar sources in January as there was no outflow from the dams and there was limited sunshine and wind flow in the month under review.

Proposed hike assailed

The CPPA’s request to Nepra has attracted strong political reaction, with PML-N president Shehbaz Sharif criticising the proposed Rs6 per unit hike in electricity bills.

In a statement, the leader of the opposition in the National Assembly said: “Raising the already unbearable electricity tariffs after dropping the massive petrol price hike bomb on the nation, is completely and utterly unacceptable.”

Mr Sharif also said that instead of controlling inflation, Imran was obsessed with controlling opponents and critics, which was unfortunate.

He added: “This Imran Niazi government knows only how to increase petrol prices due to the world market, but it was totally blind when international oil prices decreased.”

Published in Dawn, February 20th, 2022