ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) Friday allowed the government to pass the burden of Rs53 billion under the heads of quarterly adjustment mechanism and provisional relief to the government on to the consumers by increasing power tariff by Re0.53 per unit.The increase in tariff will be notified on October 1.As per the IMF agreement, the government is bound to increase power tariff under quarterly adjustment, and to this effect the increase in tariff by Re0.53 per unit is very important, as the IMF review will begin in October.The IMF has been asking the government to introduce the automatic notification mechanism of the Nepra’s quarterly and annually tariff determinations. However, the government has the power to notify the tariffs determined by the regulator.At present, the tariff determined under the monthly fuel adjustment gets automatically notified as monthly fuel cost is a pass-through-item.However, the tariff determination uploaded on the Nepra’s official website unfolded that tariff had got increased by Re0.53 per unit and at the same time it also revealed that the capacity payment had been increased alarmingly to over Rs900 billion for the ongoing financial year 2019-20 with annual generation of around 135,944 GWhs as compared to the capacity cost of around Rs.650 billion, currently built in the notified tariff.The determination also draws the attention as to how appreciation of US dollar has played havoc in hiking the tariff mentioning that time has come to revise power purchase price (PPP) references built in the notified tariff in order to capture the foreseeable impact of increased capacity payments for the financial year 2019-20 and high fuel costs or revised generation mix etc. in order to minimize the impact of quarterly adjustments and monthly FCAs.Coming to increase in tariff, spokesman for the regulator Sajid Akram confirmed saying; “Yes, Nepra has increased the tariff by almost Re0.53 per unit under the heads of quarterly adjustment mechanism and interim relief to the government.” All the distribution companies sought over R0.30 per unit with impact of Rs30.262 billion from January 1, 2019 to June 2019 under quarterly adjustment mechanism and three distribution companies Iesco, Fesco and Lesco had sought increase in tariff by over Re 0.33 per unit under Single Year Tariff and Multi-Year Tariff regime with an impact of amounting to Rs33.146 billion. Apart from it, the government had also asked for interim relief of Rs19.772 billion in the head of distribution margin for the financial year 2018-19.Under quarterly adjustment mechanism, the tariff gets increase because of capacity purchase price, variable O & M, UoSC (use of system charge) and impact of T&D losses on Fuel Price Adjustment and Impact of extra and less purchases.The power regulator for the quarter 3 and quarter 4 increased the tariff by Re0.33 per unit with the impact of Rs33 billion against the demand of Rs30.262 billion.Akram says factually under quarterly adjustment mechanism the tariff gets increased under a specific formula and the distribution companies had not calculated the tariff as per formula. However, the Nepra did not approve the petition of three distribution companies seeking increase in tariff under multiyear tariff with impact of Rs33.146 billion as the said petition did not have the required supportive documents.However, the Nepra under rule7 (4) approved the interim relief of distribution companies amounting to Rs19.776 billion as demanded by the government. In the head of interim relief, regulator has increased the tariff over Re0 19 per unit. So in toto, the tariff has got increased by Re0.53 per unit.Talking about the interim relief, the spokesman explained that whenever the government submits application to the Nepra asking for interim relief, the regulator accommodates the government under rule 7(4); however, it will finalize it when distribution companies submit petition with all documents to this effect with all the relevant and required documents.Meanwhile, the Oil and Gas Regulatory Authority (Ogra) Friday sent a summary to the Petroleum Division, recommending a cut in the fuel prices.The Ogra recommended a cut of Rs2.55, Rs3.23, and Rs2.41 per liter in the prices of petrol, diesel, and light diesel oil respectively, reports Geo. The regulator, however, recommended that the price of kerosene be hiked up Rs1.19 a liter. The revision in petroleum prices is expected to come into effect on October 1.
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