Electricity prices in Pakistan are on fire due to the fuel crisis - Energy

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  • The National Electricity Regulatory Authority approves increases in bills for the current month only
  • The increase in electricity prices in Pakistan came under the fuel cost adjustment system
  • The adjustments came after comparing the difference in fuel prices for the months of February and March
  • The total bills of consumers of the “X-Wabda” conglomerate increased by 29 million rupees
  • Karachi’s total consumer bills increased by 1.58 billion rupees

Electricity prices in Pakistan are the most prominent victims of the fuel crisis that has been going on for months, and caused a change of government after the withdrawal of confidence from the government of Imran Khan, which insisted on continuing its support and the cost of the state budget additional burdens.

The new Pakistani government entered a new turn that threatens the prices of fuel, electricity and energy in full, after it succeeded in convincing the International Monetary Fund to resume negotiations to grant Islamabad a loan. And the latter’s approval of the fund’s conditions, which include the abolition of energy price subsidies, or their temporary reduction.

And the matter got worse after the rise in the dues of the Pakistani electricity companies in favor of the Pakistan State Oil Company to up to 167 million rupees, which threatens the continuity of supply chains, especially liquefied natural gas.

Fee increase

Pakistan’s National Electricity Regulatory Authority (Nebra) has agreed to make electricity tariff adjustments, including imposing an increase on May bills and charging them to the consumer, under the Fuel Cost Adjustment Scheme.

Electricity prices in Pakistan
Nebra raises electricity price hike in Pakistan for one month – Photo from Dawn newspaper

It is noteworthy that the fuel cost adjustment system is a system that depends on linking the monthly electricity fees to the fluctuations in fuel prices.

On Friday, May 6, Nebra issued its approval to raise electricity prices in Pakistan for the current month’s bills, according to the fuel price adjustment system for the months of February and March.

Nebra allocated an increase of Rs 2.87/unit to consumers of the distribution companies affiliated to the “X-Wabda” conglomerate from last month, and an increase of 1.38 rupees/unit to consumers of Karachi for the month of February.

(Pakistani Rupee = 0.0054 US dollars)

Pakistan had resorted to the spot market to ensure the provision of liquefied gas supplies to operate local power stations, along with the endeavor of the new government headed by Shahbaz Sharif, to discuss the revival of 27 power stations with a capacity of more than 7 gigawatts after they were stopped for several reasons, including fuel shortages.

Cluster X-abda

Nebra has conducted reviews of electricity prices in Pakistan under the fuel cost adjustment system for the month of March and agreed to increase electricity prices by the distribution companies of the X-Wabda conglomerate by Rs 2.8680 per unit, the authority said in a statement after a hearing.

The Central Electricity Procurement Agency of Pakistan had applied to the authority – on behalf of the conglomerate – allowing it to add an increase of 3,157 rupees/unit, under the fuel cost adjustment system for the last month with a total increase of 32 billion rupees, but the authority reduced it to 2.8 / unit with a total increase of Rs.29 billion.

The agency attributed its estimate of the increase to be borne by the consumer because the electricity prices were estimated on the basis of the fuel cost, which is equivalent to Rs 6,229/unit, but the fuel prices pushed towards an increase to Rs 9,386/unit.

According to the agency’s data, the distribution company “X-Wabda” has been buying 13.22 gigawatt-hours of off-grid power stations during the past month at a fuel cost of 63.88 million rupees, according to the local newspaper The Express Tribune.

Under the authority’s decision, electricity bills in Pakistan for all consumers of the “X-Wabda” conglomerate are subject to the planned increase, except for the 100-unit consumer segment, and these increases are applied for only one month in bills for the month of May.

Karachi company

On Pakistan Electricity Price Increases for Karachi Consumers, Pakistan’s National Electricity Regulatory Authority (Nebra) has revised the prices and approved the increases following a revision of the fuel cost adjustment system for the month of February.

electricity in pakistan
Technicians inspect a power grid in Pakistan (Photo: Reuters)

Karachi Electric Supply Company requested an increase of Rs 3,452/unit at a total cost of Rs 2.95 billion, but the authority reduced it to Rs 1,386/unit at a total cost of Rs 1.58 billion.

After a hearing held early last month, “Nebra” confirmed its agreement to include the planned increases for all consumer segments, except for the segment of consumers of 100 units.

The Karachi Company attributed the increase request to the fact that the cost of regasification of liquefied gas for use in generating electricity from its stations amounted to 2479 rupees / million British thermal units.

This came despite the announcement by the Oil and Gas Regulatory Authority “Ugra”, last month, that it had reviewed the prices of LNG regasification for the month of February, which were estimated at $13.9048/million British thermal units (equivalent to 2449 Pakistani rupees/unit).

After reviewing and comparing the data provided by Ugra and Karachi, Nebra lowered Karachi’s proposed rate of increase by Rs 41.61 million and invited it to review Pakistan’s electricity bills issued to its consumers.

Nebra stressed that the generation of electricity was from sub-efficient plants, and that the plants known for their efficiency were not used to their full capacity during the generation of electricity, including the Korangi Gas plant.

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