ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) and several Karachi-based stakeholders have strongly opposed the Power Division’s proposal to defer a Rs 4.69 per unit negative fuel cost adjustment (FCA) for K-Electric (KE) consumers for April 2025.
The adjustment would have resulted in refunds of nearly Rs 6 billion in electricity bills issued in July 2025.
KE CEO Syed Moonis Abdullah Alvi criticized the proposed deferment, pointing out that when KE consumers faced higher FCAs in the past, the idea of a uniform national FCA mechanism was never considered. While assuring that KE would comply with NEPRA’s final decision, Alvi urged the issue be resolved fairly and in line with legal provisions.
April FCA: KE seeks Rs4.69/unit negative adjustment
“A fair decision must be made. KE will abide by Nepra’s notification,” Alvi said. “If I were an industrialist planning production and exports, this ambiguity would seem unfair.” In April 2025, KE received 1600 MW electricity from the national grid which is expected to be increased to 2,000 MW soon.
Nepra Member (Technical) Rafique Shaikh expressed dissatisfaction with the Power Division’s justification for the proposed deferment.
Nepra’s Legal Counsel Mian Ibrahim, called the Power Division’s request illegal, noting that it lacked federal cabinet approval and no stay had been obtained from the Nepra Appellate Tribunal.
“The law on fuel price adjustments is clear. Base tariffs and FCAs are governed by separate legal provisions,” Nepra’s legal team stated.
The Power Division, represented by Additional Secretary (Power Finance) Mehfooz Bhatti, claimed it was merely seeking more time from the Authority. The team argued that the negative FCA would increase the subsidy burden on the federal government.
Bhatti added that the Division was preparing a summary to issue guidelines to Nepra and had requested stakeholder input. He asked for a 10–15-day deferment to maintain uniform FCA rates nationwide. He denied that the Division was pressuring NEPRA, stating that it was following legal protocols and would seek the Law Ministry’s opinion.
However, Nepra Chairman Waseem Mukhtar, noting the public hearing had already been deferred three times, said the Regulator had not prevented the Power Division from obtaining legal advice. He emphasized that NEPRA had rejected the deferment request, particularly as a large number of intervenors had attended the hearing.
Several intervenors spoke against the proposal and also raised concerns about the continued recovery of the Debt Service Surcharge (DSS) from KE consumers.
Rehan Jawed said the Power Division appeared to be exerting undue pressure on NEPRA and urged the regulator to decide the matter strictly in accordance with the law.
Nepra Member (Law) Amina Ahmed highlighted that a provisional FCA of Rs 15.99/kWh had remained intact for nearly two years with no intervention or comments from the Power Division. “Now, after prolonged silence, the Ministry of Energy wants to shut down discussion,” she lamented. She also criticized the argument that past deferments justify current ones.
Consumer representative Arif Bilwani called for the outright rejection of the Power Division’s request, adding that there is no justification of deferment in FCA’s determination.
Tanveer Barry of the Karachi Chamber of Commerce and Industry said the request lacked formal federal cabinet or ECC approval. He noted that during periods when KE consumers paid high FCAs, no relief or uniformity was offered, even though other DISCOs received negative adjustments.
“Karachi consumers are paying the PHL surcharge and are now expected to cover circular debt repayments unrelated to them, stemming from loans secured by the federal government. This is unjust,” Barry argued. He urged Nepra to grant full FCA relief to KE consumers and reject both the Power Division’s proposal and KE’s unverified cost claims.
Discos FCA for May 2025: In a separate hearing earlier, Nepra approved a 50 paisa per unit negative adjustment for DISCOs’ May 2025 electricity bills, resulting in refunds of approximately Rs 6.133 billion. This reduction was primarily attributed to declining RLNG (re-gasified liquefied natural gas) prices. Initially, the Central Power Purchasing Agency (CPPA-G) had requested a 10 paisa positive adjustment, but updated RLNG prices reversed the request.
During that hearing, CPPA-G CEO Rihan Akhtar presented fuel price trends and generation data, noting that hydel generation in May was significantly higher, helping offset other costs. Responding to queries, Akhtar said the DSS surcharge—Rs 3.23 per unit—had been uncapped by the government and now accounted for about 10% of the sector’s total revenue.
Private sector representatives Aamir Sheikh and Rehan Jawed voiced concerns about rising furnace oil prices, blaming the hike on new Carbon and Petroleum Levies.
Copyright Business Recorder, 2025
