Pakistan:Industrial Electricity At Rs 51 and Residential at Rs 300 per unit

 

Govt concedes LNG-based electricity to cost Rs51.42 per unit this fiscal year, followed by furnace oil at Rs48.56

• Hydropower remains cheapest source at Rs6.94

ISLAMABAD:In another blow for inflation-weary Pakistanis, the electricity prices are likely to go up from today as the power tariff will be jacked up to Rs30 per unit.

 The government has formally acknowledged that imported liquefied natural gas (LNG) has become the most expensive fuel for power generation in the country, even surpassing furnace oil for whose replacement the multibillion-dollar LNG infrastructure was set up in the first place almost a decade ago.

In a major decision setting the reference power-purchase tariff for each month of the current fiscal year, the National Electric Power Regulatory Authority (Nepra) has only reinforced that hydropower, at Rs6.94 per unit, remains the cheapest source of electricity supply to the national grid.

This is way cheaper than the Rs51.42 per unit cost of power produced from imported LNG, which is regasified before being used as a fuel. It is followed by furnace oil-based power generation, projected at Rs48.56 per unit.

Most of the power generation capacity contracted by the PML-N government in its previous tenure (2013-18) that has come on line so far pertained to regasified liquefied natural gas (RLNG) and coal.

Also, the power regulator, which operates under the cabinet division, has put on record that the key factor behind the skyrocketing electricity prices is fixed capacity charges — 71pc of the total cost — that also involves exchange rate losses, while energy cost is around 29pc of the total power-purchase price.

This is despite the fact that a major chunk — 63pc — of the total power supply in the country is based on domestic resources.

Determining the reference power-purchase price is of utmost importance, according to the regulator, as it is a direct pass-through to consumers and accounts for a major (90pc) component of the consumer-end tariff. All future monthly fuel charge adjustments (FCAs) and quarterly adjustments (QTAs) are worked out based on the projected notified power-purchase price references.