Fuel Adjustment and Its Impact on Electricity Bills

electricity bills


This year has been difficult. Residents of different localities and cities staged protest demonstrations against the excessive electricity bills on Wednesday. Protests across the country blocked main roads, burnt their electricity bills and pushed the government to abolish the taxes on electricity bills.

Hamza Sheikh, in his post on microblogging site stated that against last year’s bill of Rs4,000 for the month of July, it is a cruel act of power utility that Rs24,000 bill has been issued in July. He claimed that Lesco ruthlessly restored to disconnecting connections of customers who have not been able to pay bills. Another individual on Facebook’s page Voice of Customer posted that he has been charged PKR 7000 for electricity even though his entire family along with him were away for the whole month. My own maid complained that her electricity bill was PKR 15,000 despite using a single fan, and no AC.

The government has defended the high prices through the Fuel Cost Adjustment. It is imposed monthly to adjust electricity bills based on fluctuations in the fuel prices in the international markets.

Determining FCA

The Fuel Cost Adjustment is determined by undertaking several factors. The key determinant is the source of fuel used for generating electricity. For instance, if a power plant uses coal, it will be assessed how much coal it used, and the price the coal was purchased.

The value of the local currency also influences the FCA. If the value of the Pakistani rupee decreases, the electricity bill is going to be high.

 Can the FCA Decrease?

The FCA will decrease, however, if the country shifts to power generation through water, wind and solar energy. Pakistan’s reliance on coal, and other non-renewable energy resources to generate electricity has taken a toll on the poor people, who can no longer afford to use a simple fan in this scorching weather.

Using environment friendly options such as solar energy, and wind for generating electricity is not only a long term solution but also important to safeguard our environment. The PM took notice of the skyrocketing electricity prices, but this is not enough. Earlier the government used to provide subsidies to keep the electricity bill under control, but it led to a massive budget deficit. Pakistan cannot afford to provide electricity to the masses at subsidised rate. The need of the hour is to turn towards alternate options and make sure the country is given affordable electricity with zero power outages.



by Amna Sheikh


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