The government would pass on the benefits of the negative impact of fuel charges adjustment (FCA) to agricultural and domestic consumers who use up to 300 units of electricity each month, Business Recorder reported.

Any negative adjustments related to the monthly FCA “will not affect domestic consumers who benefit from a subsidised electricity tariff,” according to the Power Division. It was based on the Economic Coordination Committee’s guidelines issued on May 21, 2015.

In a decision made on June 24, 2015, the authority declared that negative FCA adjustments would not apply to non-time-of-use domestic consumers using up to 300 units. Moreover, the authority’s ruling regarding the non-applicability of negative FCA to agricultural consumers has been in effect since November 2010.

The energy ministry, in a letter dated June 9, 2021, has outlined new policy guidelines aimed at re-targeting power subsidies moving forward. In accordance with such guidelines, the authority issued a decision on September 23, 2021, which established new categories for domestic consumers: protected and non-protected non-time-of-use (non-TOU) consumers.

Since the introduction of such categories, tariffs for the non-protected group have been increased to align with government policy.

In light of such tariff rationalisation, the decision to exclude non-protected domestic consumers and agricultural consumers from negative FCA might contradict the principles established in previous decisions.

The Power Division has urged the National Electric Power Regulatory Authority to reconsider the exemption of negative FCA for such non-protected domestic and agricultural categories.

Earlier this month, Prime Minister Shehbaz Sharif sought a comprehensive plan from his cabinet members after the International Monetary showed “willingness” to consider reducing electricity prices.

Read more

NEPRA approves Rs4.89 per unit decrease in electricity tariff for KE consumers

Electricity prices reduced for DISCOs and K-Electric consumers

NEPRA predicts massive increase in electricity prices in upcoming months

Last year, NEPRA approved a negative adjustment of 86 paise per unit in the FCA for distribution companies (Discos) that resulted in a total refund of approximately Rs10 billion to consumers for August 2024.

In December, sources told Aaj News that the government planned to reduce electricity tariffs by Rs12 per unit by March 2025 through agreements with private Independent Power Producers, government power plants, and renewable energy sources such as wind and solar.