The FCA is reviewed every month in accordance with the tariff regime in effect throughout the country and is usually only applicable to the consumer’s bills for one month.
K-Electric has asked NEPRA to approve a PKR 10.26 per unit reduction in customer bills under the Fuel Charges Adjustment (FCA) for the month of December 2022. This request has been made through NEPRA’s FCA mechanism.
The FCA is reviewed every month in accordance with the tariff regime in effect throughout the country and is usually only applicable to the consumer’s bills for one month.
FCAs are affected by changes in global fuel prices, which are passed on to consumer bills in accordance with NEPRA and the Government of Pakistan’s rules and regulations.
Fuels such as RLNG and furnace oil have seen consistent decreases in the global market for the past several months, allowing KE to benefit its customer base. This is also possible because KE’s generation fleet is used efficiently and effectively to supply energy to Karachi.
LNG and furnace oil are fossil fuels, and both can be used for power generation and industrial processes. However, RLNG is considered to be a cleaner-burning fuel than furnace oil, and it is often used as a replacement for other fossil fuels in order to reduce emissions and improve air quality.
Customers will most likely see the benefit of this reduction in their February 2023 bills. The December FCA was lower primarily due to a 17%, 15%, and 29% decrease in RLNG, furnace oil, and power purchased from CPPA-G, respectively, compared to September 2022.
The process of adjusting the cost of fuel for a specific period of time, usually on a monthly basis, for businesses and organizations that rely on fuel for their operations, such as airlines and trucking companies, is known as fuel charges adjustment.
The adjustment is typically made to account for changes in fuel prices and to ensure that the cost of fuel is accurately reflected in the prices charged to customers. This process can also be referred to as “fuel cost recovery” or “fuel surcharge.”