TRADE & ECONOMY

Discos set to squeeze Rs30bn more from users

2023-09-20
Discos set to squeeze Rs30bn more from users

Despite a nearly 26% increase in the annual base tariff and ongoing 18% quarterly adjustments, electricity costs in Pakistan continue to rise as ex-Wapda Distribution Companies (Discos) seek an additional Rs1.83 per unit in fuel cost adjustment (FCA), aiming to extract Rs30 billion more from consumers next month. This request comes despite over 74% of power generation relying on local, cheaper fuel sources such as hydro, coal, gas, nuclear, wind, solar, and bagasse.

 

The Central Power Purchasing Agency (CPPA) filed a joint petition on behalf of Discos with the National Electric Power Regulatory Authority (Nepra) for the additional FCA, which Nepra has accepted, scheduling public hearings for September 27 to assess its justification within the FCA mechanisms and economic merit order.

 

In August, Pakistan's power generation was dominated by hydropower plants contributing nearly 38% to the national grid, followed by LNG-based generation at 17.17%, nuclear power plants at 12.79%, and local and imported coal-based generation at 10.3% and 4.51%, respectively.

 

Despite the prevalence of cheaper energy sources, the FCA request underscores ongoing challenges in managing electricity costs for consumers, raising concerns about the sustainability of energy pricing and the financial burden it places on Pakistani households and businesses.