Temporary change over fuel price adjustment
The National Electric Power Regulatory Authority has increased the price of electricity Rs0.48 for one month to adjust for fuel prices.
The price hike was in line with August fuel price adjustments. NEPRA says the cost of generating electricity was Rs3.68 per unit while the advance production tariff was Rs3.20 per unit.
The electricity distribution companies will be able to collect Rs5 billion from November bills after charging the increased rates.
The temporary one-month hike in electricity price will not apply to K-Electric customers.
What is the fuel price adjustment?
One component of the electricity tariff is fuel price adjustment. The tariff or price of electricity includes charges for fuel (think furnace oil) used to make electricity. The price set at the time of billing changes over the month because of changes in international oil prices.
It can increase or decrease, which means an adjustment has to be made later on. The fuel price or charges adjustment is the mechanism that allows power companies to do this and recover any legitimate increase in fuel costs.