NEPRA Allows DISCOs and KE to Recover Fuel Adjustment Surcharge from Consumers in Installments over 8 Months.
Power distribution companies (DISCOs) and K-Electric (KE) have been authorized by the National Electric Power Regulatory Authority (NEPRA) to collect deferred fuel adjustment surcharges from their customers. Surcharges can reach Rs 14.24 per unit, which will be collected over an eight-month period from March to October 2023.
Domestic consumers who are protected and use zero to 200 units a month will pay the DISCOs Rs10.34 per unit, whereas unprotected consumers who use zero to 200 units will be charged Rs 14.24 per unit. Private agricultural consumers will pay Rs9.90 per unit, while those consuming 201 to 300 units will pay Rs 14.24 per unit.
In the case of KE, the regulator has permitted a fuel adjustment surcharge recovery of up to Rs 13.87 per unit. Protected domestic consumers who use zero to 200 units per month will pay KE Rs9.97 per unit, while unprotected consumers who use zero to 200 units will pay KE Rs13.87 per unit.
Private agricultural consumers will pay Rs9.90 per unit, while those consuming 201 to 300 units will pay Rs 13.87 per unit. The surcharge will be paid to KE between March and October 2023.
In June and July 2022, the government was supposed to pass on the fuel adjustment surcharge. But Shehbaz Sharif, the prime minister, postponed its collection.
As the rebasing of the uniform tariff determined by the authority was informed by the federal government to not burden consumers disproportionately in the sequence of Rs3.5 per unit in July 2022 and Rs3.5 per unit in August 2022, NEPRA has justified the decision to allow the recovery of deferred surcharges.
However, consumers were simultaneously hit by the rebasing of Rs7 per unit and the Rs9.8972 per unit fuel charge adjustment in August 2022 bills, which led to an average increase of Rs16.90 per unit over the July 2022 rates. Customers’ electricity bills for August and September 2022 were significantly increased by these tariff adjustments.
In addition, the country experienced widespread flooding as a result of the monsoon rains, which impacted those who used electricity. In that case, the prime minister made the decision to spread out the recovery of the fuel charge adjustments for KE and DISCO, which were to be paid in August and September 2022.
The energy ministry reaffirmed during a public hearing that the fuel charge adjustments postponed for some consumer categories in August and September 2022 were made to provide relief, taking into account the base tariff revision and the impact of floods.
Electricity users, however, vehemently objected to the recovery of the deferred surcharge and asked the regulator not to subject them to such a significant increase in electricity rates.
Overall, the choice to permit the recovery of deferred surcharges has been made to strike a balance between the interests of consumers and power companies, but it is still unclear how this will affect consumers’ access to affordable electricity in the long run.
