ISLAMABAD  - Already burdened masses would find a tsunami of inflation in the days ahead as National Electric Power Regulatory Authority (Nepra) has allowed power distribution companies (Discos) to raise their power tariff by Rs 2.24 per unit, on account of fuel adjustment for January 2014.

Power consumers already bearing heavy brunt of sky-rocketing power prices coupled with hour-long power outages for a long time would now bear another blow as Rs2.24 per unit hike in power tariff would trigger inflation in the prices of essential commodities and cost doing business. With this hike in per unit of power, miseries of common public would worsen and it is likely to sweep away what the masses left with.  The power sector regulator allowed power tariff hike during a public hearing conducted here on Thursday, with Nepra vice Chairman Khawja Muhammad Naeem in chair.

Interestingly, the Central Power Purchasing Agency (CCPA) had sought increase in power tariff by Rs 2.19 per unit but the power sector regulator increased the tariff by Rs 2.24 per unit leaving the participants of the hearing in utter surprise and left the people in extreme distress to some extent. Domestic power consumers use 50 units in a month and the power consumers of KESC have been exempted from the hike. The raise will reflect in monthly power bills of March and to some extent would left the people in extreme distress.

The Central Power Purchasing Agency (CPPA) informed during the hearing that the actual fuel cost of power had jumped to Rs11.77 per unit against the reference price of Rs9.58 per unit. Therefore, the CPPA pleaded, power firms should be allowed to raise their power tariff by 2.19 per unit to recover the additional cost incurred. Thereafter, Nepra allowed the price hike by Rs 2.24 per unit. Raising serious concerns over transmission losses, which stood at 35 paisa per unit and producing electricity through furnace oil instead of cheaper source of gas, Nepra members noted that government produced power from expensive fuel to minimise load shedding which led to hike in power tariff putting additional burden on the consumers.

During the course of Nepra’s hearing, it was observed that power production was low but generation cost was high due to generation through furnace oil. It was noted that 6.19 billion units were produced at cost of Rs 72.97 billion. The average generation cost was Rs 11.77 per unit in month of January 2014. It was noted that power producers had been producing average 8 billion units per month at cost of Rs 54 billion but during month of January, generation was less whereas cost was high putting additional burden on the consumers.

It is worth mentioning here that representatives of CPPA, present on the occasion, informed the Nepra that hydel generation was low in month of January and therefore, electricity was produced through furnace oil and other sources. They said that total share of hydel generation was 13 per cent, coal based generation 0.11 per cent, High Speed Diesel (HSD) 3.07 per cent, furnace oil 54.51 per cent, gas 19.19 per cent, nuclear 7.07 per cent and import from Iran 0.48 per cent. The cost of generation by coal was Rs 3.61 per unit, HSD Rs 23.07. RFO Rs 17.08, gas Rs 4.37, nuclear Rs 1.32 and imported electricity from Iran Rs 10.55 per unit.