Prime Minister Shahbaz Sharif yesterday announced the abolition of Fuel Charges Adjustment (FCA) from electricity bills.
But do you know what fuel price adjustment is? And who determines it and how, and is there no choice but to put the burden on the people?
In addition to talking to some experts in this regard, the British broadcasting organization has also taken help from the announcement issued by ISCO yesterday.
Tahir Abbas, Head of Research at Arif Habib Limited, said that to understand fuel price adjustment, it is important to understand the actual fuel cost (the cost of fuel in a month) and the reference fuel cost.
He said that at the beginning of every financial year, the National Electric Power Regulatory Authority (NEPRA) gives a reference fuel cost, i.e. a benchmark against which the total cost of fuel every month can be compared.
The total cost of fuel used in the production of electricity in a month (basket fuel cost) is calculated based on the cost of fuel (such as coal, LNG, furnace oil) used in different sources of energy in the country. goes
And so at the end of every month, the total fuel cost of that month is compared with the reference fuel cost and accordingly this ‘adjustment’ is added to the electricity bills after two months.
If the total fuel cost in that month is more than the reference cost, then the amount of FPA will increase in your bill, while if the total fuel cost of that month is less than the reference cost, then the amount of FPA will decrease. It is called fuel price adjustment.
