After a huge backlash and outrage on social media regarding the hike in tariff, K-Electric has introduced an online fuel cost adjustment (FCA) on its website. The cost adjustment calculator permits the consumers to calculate the complete affect on their monthly bills based on their consumption.
KE has made this announcement in a statement yesterday. The FCA is based on a notice that was issued by NEPRA via an SRO dated December 27, 2019, which mentions the details of both the amount and the span during which the amount is to be adjusted. All the relevant details about FCA would also be given in respect to the consumer bills.
It indicated that the pending adjustments would also be added to the bills of the consumers, and the adjustments would be spread over a period of 9 months beginning from the 20th of January.
The step is part of the mechanism of NEPRA, as the fuel is a pass-through cost, to the consumers of all the power suppliers in the country and KE is no exception to this.
According to the NEPRA mechanism, a refernece fuel cost is taken into consideration for calculating the tariff, and any surge or dip in the actual fuel price in comparison to this reference cost is adjusted after getting verification by NEPRA, which is eventually passed on to the electricity consumers.
It also mentioned that no-cost adjustment was passed down to the consumers from July 2019 as the Multi-Year Tariff policy of KE was experiencing a delay.
The sole power firm of the city has said that it has been taking all the extra cost on itself that is generated by the fuel adjustment for the last 3 years, surging its financial cost owing to the rising in borrowing.
Karachi Electric said that the new MYT was informed by the Power Division Ministry in May last year, and the firm’s quarterly and monthly tariff differences are based on it. The confirmation was offered during a public hearing by NEPRA in the month of August 2019.