Yet another ‘adjustment’

Nepra’s recent decision to increase the fuel cost adjustment (FCA) charge in consumers’ electricity bills for May has not only caused widespread concern but also sparked a wave of public outcry. The decision to raise power prices has been met with sharp criticism and deep scepticism, with many questioning the government’s ability to forecast fuel costs accurately. Despite the fact that 79% of power generation comes from cheaper local fuels, the government has sought clearance from Nepra, the power regulator, to extract about Rs23 billion more in FCA from consumers for electricity consumed in March. This has resulted in consumers being burdened with ballooning bills despite lower consumption patterns. Instead of taking measures to ensure there is some predictability in consumers’ bills, the government just keeps squeezing people’s wallets. Interestingly, the almost 46% increase in FCA over the March figure cannot be blamed on international markets or currency devaluation because imported fuels like coal, diesel and furnace oil were apparently not used at all. The government needs to take immediate measures to improve its forecasting capabilities and avoid such situations in the future. The power sector bureaucracy must also be held accountable for its inefficiencies and poor decision-making. Nepra needs to follow up on its criticism of distribution companies with actual action. If consumers are forced to pay for the government’s inability to forecast fuel costs accurately, the bumbling bureaucrats who keep failing to craft a reliable power-pricing policy should also be sent home. Unfortunately, the government can’t just refuse to cover the losses created by poor leadership because most distribution companies are government-owned. However, when privately-held K-Electric begins pushing for a massive spike in its tariffs to cover its losses, we must question why taxpayers, rather than the company’s management, must pay for its leadership’s mistakes. Published in The Express Tribune, May 10th, 2024. Like Opinion & Editorial on Facebook, follow @ETOpEd on Twitter to receive all updates on all our daily pieces.  

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