Electricity bills: Rs 2.56 per unit fuel adjustment sought for November as industry asks for levy cut

Electricity consumers could pay an extra Rs 2.56 per unit in their November bills as a fuel cost adjustment (FCA) for September, after the Central Power Purchasing Agency (CPPA) asked Nepra on Thursday to let it recover about Rs 32.76 billion, Dawn reported. Because October's positive adjustment expires at the same time, CPPA says the net increase on the bill will not exceed Rs 1.45 per unit.

At the same hearing, manufacturers and the power division itself asked for the petroleum levy on the diesel and furnace oil burnt in power plants to be removed or cut.

Why September cost more

The actual fuel cost in September was Rs 10.022 per unit, against a reference of Rs 7.46. With LNG and other cheaper fuel short, diesel and furnace oil made up 3.6% of generation:

In August diesel plants made only 80 GWh, at about Rs 54 a unit. Average fuel cost was up almost 37.5% on a year earlier, while demand rose 6.5% and industrial use 6.7%. A government official told Dawn this is the highest adjustment for the month in recent years.

The levy argument

The petroleum levy is about Rs 76,000 a tonne on furnace oil and Rs 80 a litre on diesel. Industry representatives said it adds about Rs 10 per unit to electricity made from those fuels, and that removing it would cut their generation cost from about Rs 62 to Rs 44 to 50 a unit. Naveed Qaiser, chief financial officer of the Power Planning and Monitoring Company, agreed the levies had a "substantial impact on generation costs" and said the power division has been pushing for their removal or reduction. He added that tariffs have already fallen by about Rs 10 a unit for consumers in general and up to Rs 18 for industry.

Industry also asked for the surplus incremental package, which it says adds about Rs 11 a unit for grid consumers, to be suspended. Nepra will announce its decision on the FCA after reviewing the data, which members questioned at the hearing.

What it means for your bill

The FCA is charged on every unit you used in September and appears as a separate line on the November bill. Protected consumers using up to 200 units have usually been exempt from FCAs; check the line on your bill. As a rough guide, if the full Rs 1.45 net rise is allowed:

• 200 units: about Rs 290 more
• 300 units: about Rs 435 more
• 500 units: about Rs 725 more

These are before taxes, which are added on top. Work out your own bill on our electricity bill calculator, and see our coverage of the petroleum levy bill in the National Assembly.