The National Electric Power Regulatory Authority (Nepra) has slashed electricity tariff for consumers of nine power Distribution Companies (Discos) by 38 paisa per unit on account of fuel surcharge adjustment. However, this impact will not be passed on to lifeline consumers who use 50 units or less in a month.
Talking to Business Recorder, Registrar Nepra elaborated that the price of energy varies from two to three accounts. For instance, if hydel generation percentage or gas fired generation increases, tariff will definitely decrease and if consumption of furnace oil increases, fuel surcharge adjustment will also increase.
According to him, for June 2010 fuel adjustment surcharge was 64 paisa per unit whose impact was eliminated after the July's new fuel adjustment surcharge, which was calculated at 26 paisa per unit (kWh). This implies if the consumers' tariff was 64 paisa kWh higher due to June's fuel cost adjustment, it will automatically reduce by 38 paisa when the July impact of 26 paisa kWh will be implemented.
Unconfirmed reports suggest that power companies had sought an increase of 52 paisa per unit under the fuel adjustment formula for July, but the power regulator allowed an increase of 26 paisa and turned down the rest sought on account of system losses, late payments and overall circular debt. Registrar Nepra said that actual fuel component for June was Rs 4.35 kWh against July's component reference price of Rs 4.09 kWh which means the new tariff will be 38 paisa per unit less than the existing tariff.
Interestingly, the media generally did not give the actual impact of new adjustment in tariff because of which the government was criticised. Politicians submitted adjournment motions in the National Assembly whereas business community issued press releases condemning the hike with the government seeking clarification from Nepra.
Islamabad Chamber of Commerce and Industry stated that businessmen in a meeting at the chamber lamented the 26 paisa per unit hike in electricity rate by Nepra under the garb of monthly fuel adjustment formula and termed it a cruel decision as it would negatively impact the interests of people, businesses and the overall economy.