The National Electric Power Regulatory Authority (NEPRA) has announced a reduction of Rs 1.28 per unit in electricity prices for September 2024 under the Fuel Charges Adjustment (FCA). This reduction, effective in November’s billing cycle, reflects adjustments based on global fuel price variations that impact monthly power bills.
The Central Power Purchasing Agency (CPPA) initially proposed a smaller decrease of 71 paisa per unit, based on data for September. However, following an in-depth evaluation and a public hearing held on October 30, NEPRA determined a more substantial cut of Rs 1.28 per unit, offering consumers an additional 42 paisa per unit in relief compared to the previous adjustment of 86 paisa in August.
This FCA adjustment is applicable across most consumer categories, though certain groups are excluded. Lifeline customers, domestic users consuming up to 300 units, agricultural connections, electric vehicle charging stations, and prepaid customers will not benefit from this reduction. However, domestic consumers with Time of Use (ToU) meters, irrespective of their consumption levels, are eligible to receive the adjustment.
The mechanism of FCA allows electricity prices to be modified in response to fluctuating fuel costs, ensuring that changes in the global energy market are passed on to consumers. When fuel prices decline, FCA-driven adjustments lead to reduced electricity bills, while rising fuel costs result in higher charges. NEPRA’s adjustment aligns with these fluctuations, offering reprieve to eligible users.
CPPA’s September report indicated that Pakistan generated a total of 12,487 gigawatt-hours (GWh) of electricity, incurring an average production cost of Rs 8.34 per unit, amounting to Rs 104.1 billion. This data informed NEPRA’s decision to authorize a more substantial FCA reduction than initially requested, underscoring the authority’s responsiveness to current energy costs.
Notably, the power tariff regime for K-Electric, Karachi’s exclusive electricity provider, remains unaffected by this adjustment, leaving Karachi residents without the benefits of this FCA reduction. All other Distribution Companies (DISCOs) are directed to implement this revised adjustment, adhering to any court orders and reflecting the reduction in November billing for eligible consumers.
This decision signifies NEPRA’s commitment to consumer welfare amid fuel price shifts, allowing for economic relief at a time when energy costs continue to be a critical factor for household budgets. By passing on these reductions, NEPRA eases the financial strain on households and businesses, maintaining an adaptive and consumer-focused approach to energy pricing.
