The National Electric Power Regulatory Authority has reduced the electricity price for K-Electric consumers by Rs2.17 per unit.
The power tariff was reduced because of fuel adjustment charges for the last 11 months, Nepra said in a notification.
The new tariff will be applicable from March 2021 to May 2021.
What are fuel adjustment charges?
A component of KE’s tariff is fuel adjustment charges. The tariff includes charges for fuel (think furnace oil) used in electricity generation. The price taken at the time of billing varies over the course of the month because of changes in international oil prices.
It can increase or decrease, which needs adjustment. The adjustment allows power companies to recover any legitimate increase in the fuel cost. Now, you may wonder whether you get the benefit when fuel charges decrease.
The benefit of any reduction in fuel price is given only to those who consume 301 units a month or more. That, by the way, is a double negative for the middle segment (300 units or less) since they pay more in case of an increase but don’t get any benefit in case of a decrease — lifeline consumers (50 units per month or less) aren’t affected in either case.