The Central Power Purchasing Authority (CPPA) has formally requested an increase in electricity prices for a one-month period, citing the need for a fuel cost adjustment.
In a detailed petition sent to the National Electric Power Regulatory Authority (Nepra), the CPPA has proposed a hike of Rs2.10 per unit in the power tariff. This adjustment, if approved, is expected to compensate for the fluctuations in fuel prices and their impact on electricity production costs.
Nepra is set to review and deliberate on the petition during a scheduled hearing on July 31. Following the review, Nepra will decide whether to approve the proposed increase. Should the petition be approved, a formal notification will be issued to inform the public and enforce the new tariff.
This proposed increase is likely to place an additional financial burden on electricity consumers across the country. It comes in the wake of a recent decision by the government to raise the base tariff by up to Rs7.12 per unit, effective from July 2024. The previous hike was part of broader measures aimed at addressing the financial challenges faced by the power sector, including covering the costs of imported fuel and addressing circular debt.
Energy experts have warned that continuous increases in electricity tariffs could lead to higher costs for households and businesses, potentially slowing economic growth and increasing the cost of living. The government, on its part, argues that such adjustments are necessary to ensure the sustainability of the power sector and to attract investment for infrastructure improvements.
The CPPA’s petition emphasizes that the proposed Rs2.10 per unit increase is crucial for maintaining the stability of the electricity supply chain. It highlights the volatility of global fuel markets and the corresponding impact on local electricity production costs. The adjustment is framed as a necessary step to ensure that the power generation companies can continue to operate efficiently without incurring losses that could disrupt supply.
