The inside story of 9 rupees power tariff increase for domestic consumers in less than one month in Pakistan

BusinessThe inside story of 9 rupees power tariff increase for domestic consumers...

Islamabad, Pakistan: The National Electric and Power Regulatory Authority (NEPRA) whose Chairman takes around 0.7 million salary per month has announced an increase of Rs. 7.90 per unit of electricity and the price for each unit is now around Rs.30 plus for domestic consumers. Interesting to mention that the Chairman OGRA is receiving Rs1.1 million per month as salary.

If someone goes through the statement of per-unit cost, one can find that regulatory authority had allowed an increase in power tariff on account of variation in capacity charges, variable operation, and maintenance (O&M) cost, use of system charges, market operation fee, and fuel cost adjustment (FCA) impact of transmission and distribution losses for the second quarter of the financial year 2021-22. So everything is passing to consumers from electricity theft to bad management and lack of technical services that can low down maintenance costs.

In Public Accounts Committee, the NEPRA chairman confirmed that distribution companies had a concession of 13% power line losses. However, in practice, the power losses were found to be at 17%. In other countries, line losses are considered “Theft” but in Pakistan, they are referred to as power losses due to bad distribution systems and weather conditions. He also informed PAC members that 65 percent of electricity was being stolen from the system of the Quetta Electric Supply Company (Qesco). So-called line losses are also high in KPK distribution companies.

The increase per unit of electricity is referred to high prices of energy (coal-gas-oil) as thermal power plants are the main source of energy production in Pakistan under the IPP scheme. Pakistan can generate 41,000 megawatts of electricity if all power plants are run at full capacity but need energy resources. According to NEPRA officials, the prices of petroleum products significantly rose over the past few months in the global market. They added the cost would have spiked further had power plants used expensive fuels.

The Central Power Purchasing Agency (CPPA) officials are of the view the cost of coal in light of the war between Russia and Ukraine and added that LNG cargoes were available at a cost of $42 per unit by the end of the July, but Pakistan could not purchase them due to its financial hardships. However, nobody is ready to give an answer that why did PTI government not buy LNG when its price was around 5 to 6$ per unit?

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