Nepra has approved increases totalling about Rs2.58 per unit on electricity bills (Dawn; Geo News; The News; Aaj News).
The two components
| Adjustment | Amount | Applies to | Cost | |—|—|—|—| | Fuel charges adjustment (for July) | Rs2.0581/kWh | September bills | ~Rs33bn | | Quarterly tariff adjustment (for Apr-Jun) | Rs0.5194/unit | Sept, Oct, Nov | Rs12.67bn |
The two sum to Rs2.5775, which is the Rs2.58 headline. Total additional burden: about Rs45.67 billion.
Both apply nationwide, including to K-Electric consumers. The notification was issued on Friday.
In practice September bills rise by roughly Rs3 a unit, with 52 paise persisting through October and November.
The cause
The fuel adjustment is attributed to “expensive LNG purchases from the spot market.”
That is the sentence that connects this to everything else in the week. Pakistan buys LNG on the spot market when contracted supply falls short, and spot LNG prices track the same Gulf disruption that has taken Brent above $93 and thinned traffic through the Strait of Hormuz to four vessels a day.
The quarterly component covers variation in capacity charges, variable operations and maintenance, use-of-system charges, the market operator fee, and the fuel adjustment’s effect on transmission and distribution losses.
Who is exempt
Lifeline consumers, electric vehicle charging stations, prepaid consumers, and those on the incremental consumption package.
The mechanism, and its politics
Nepra operates an automatic pass-through: fuel cost changes reach consumers monthly, and power purchase cost variations quarterly. The regulator is not exercising discretion so much as executing a formula.
That is the defence and also the problem. A formula that passes every cost increase to consumers within weeks gives the distribution companies limited incentive to reduce the losses that the formula also passes on — and transmission and distribution losses are explicitly among the items in the quarterly calculation.
What it adds to
Electricity for the first quarter was already up 25.24 per cent year on year in this week’s Sensitive Price Index. August headline inflation was 11.1pc, driven by food and energy. This adds to both.
