Power Division projects Rs2.56 per unit increase in Nov bills, says bigger hike averted due to load management

The Power Division forecasts a Rs2.56 increase per unit in November electricity bills due to fuel cost adjustments (FCA) for September, attributed to the use of expensive fuel for electricity generation. This projected rise could generate around Rs33bn for the division. Despite the potential for a larger hike of Rs3.44 per unit, targeted load shedding managed to keep the increase at Rs2.56 per unit.

The Ministry of Energy averted a possible Rs5-6 per unit hike in September fuel price adjustments (FPA) through timely actions, including load management, which limited the projected adjustment to the current figure. The division stated that targeted load management for approximately two to two-and-a-half hours in September helped to reduce reliance on costly fuels, saving consumers from an additional burden of up to Rs3.44 per unit.

Moreover, providing imported re-gasified liquefied natural gas (RLNG) at domestic gas prices further alleviated the burden on consumers by 83 paisa per unit. However, international fuel prices have surged due to the Middle East conflict and disruptions to fuel supply chains after the closure of the Strait of Hormuz. The division noted that fuel price adjustments and quarterly tariff adjustments from January-August have only amounted to 65 paisa per unit, representing a 1.9% increase over the base electricity tariff.

The September FPA is projected to be Rs1.45 per unit higher than August's Rs1.11 per unit FCA, leading to an estimated financial impact of Rs32.7bn on consumers' electricity bills in November. The Power Division remains vigilant about international fuel market developments and supply chain conditions, taking measures to mitigate the impact of external price shocks on electricity consumers.