Islamabad, August 22, 2024 – The National Electric Power Regulatory Authority (NEPRA) has approved K-Electric’s (KE) request for provisional monthly Fuel Charge Adjustments (FCA) for May and June 2024, at rates of Rs 2.59 and Rs 3.168 per kWh, respectively.
This decision, announced on Wednesday, is set to increase the financial burden on electricity consumers in Karachi and surrounding areas, who are already grappling with high electricity bills.
The approval by NEPRA is expected to result in a noticeable increase in electricity costs for consumers. Experts warn that the hike will further strain household budgets, particularly at a time when many are already struggling with inflation and rising living costs.
However, in a statement issued by NEPRA, the regulatory authority emphasized that the increased charges would not be applied to customer bills all at once. Instead, the impact will be spread over two months to ease the burden on consumers. Specifically, the FCA for May 2024 will be reflected in electricity bills issued in October 2024, while the FCA for June 2024 will be included in November 2024 bills.
According to NEPRA, the net increase in customer bills due to the FCA in October will be Rs 1.59 per unit, and in November, it will be Rs 0.58 per unit. The phased implementation is intended to minimize the immediate impact on consumers.
Fuel Charge Adjustments are a regular feature in electricity billing, driven by fluctuations in global fuel prices and changes in the energy generation mix. These adjustments reflect the cost variations that utilities like KE incur in producing electricity, which are then passed on to consumers following NEPRA’s scrutiny and approval.
While this process often leads to increased bills when fuel prices rise, it also offers relief to consumers when global fuel prices decrease, as reductions are similarly reflected in customer bills.
Despite NEPRA’s efforts to manage the impact of these adjustments, the approval has been met with concern from consumer advocacy groups and the general public. Many argue that the cumulative effect of rising FCAs, along with other charges, is pushing electricity costs to unsustainable levels for average consumers.
As KE continues to adjust its rates in response to fluctuating global fuel prices, the ongoing challenge for both the utility and the regulator will be to balance the need for financial sustainability with the goal of protecting consumers from excessive price hikes. The latest FCA approvals will undoubtedly add to the debate over electricity pricing and affordability in Pakistan, particularly in major urban centers like Karachi, where KE holds a monopoly on power distribution.
