Rs. 11.33/ kWh likely be the FCA for Karachi for May 2022

Karachi (Muhammad Yasir) K-Electric requested the National Electric Power Regulatory Authority (NEPRA) to increase the power tariff by Rs 11.33 per unit on account of fuel charges adjustment (FCA) for the month of May. Per applicable tariff across the country, fuel adjustment is reviewed every month and is applicable on consumer bills for only one particular month.

The major impact on the monthly Fuel cost adjustment of May 2022 is due to an increase in the fuel price increase of Furnace Oil and power purchased from CPPA-G. The price of Furnace Oil in May 2022 has increased by 38% from March 2022 while the price of RLNG between March to May 2022 has increased by 50%.

The price of electricity from CPPA-G in May 2022 has increased by 53%. The price of CPPA-G as of May 2022 is Rs 13.897/KWh as compared to the price of Rs 9.387/ KWh in March 2022.

Fuel Charge Adjustment (FCA) is incurred by utilities due to global variation in fuel prices used to generate electricity and change in the generation mix. These costs are passed through to the consumers following NEPRA’s scrutiny and approval and are one-time charges. Consumers also receive a benefit when the cost of fuel decreases.

As per NEPRA guidelines, the submissions will be discussed in the public hearing on the 4th July. The regulator will approve the request, after scrutiny, and issue instructions on the period during which these costs can be applied to consumer bills.