The Power Division has shared the Circular Debt Management Plan (CDMP) with the International Monetary Fund (IMF) and the World Bank. This plan is the basis for revisions to the base tariff, including the impact of Quarterly Tariff Adjustments (QTAs).
The CDMP is formulated once a year, and any changes during the year are covered through adjustments in QTAs. The CDMP that was shared with the IMF was based on an exchange rate of Rs 286/$, RFO price of Rs 110,000 per ton, RLNG price of Rs 3,555 per MMBTU, imported coal price of Rs 42,584 per ton, USCPI of 318, local CPI of 263, and KIBOR of 19.40%.
In July, Nepra approved a re-basing of Rs 5 per unit across the board. This was followed by substantial increases in QTA and FTAs. The Power Division wanted a positive adjustment of Rs 10 per unit through re-basing to offset the jerks of QTAs and FCAs, but Nepra did not allow this.
The Secretary of Power, Rashid Langrial, said that the CDMP is approved by the federal cabinet and shared with the IMF.
In simpler terms:
The Power Division has shared a plan with the IMF and World Bank that outlines how it will manage the country's circular debt. This plan is the basis for setting the base electricity tariff, which is adjusted every quarter.
The plan is based on a number of assumptions, such as the exchange rate and fuel prices. If these assumptions change, the tariff will be adjusted accordingly.
In July, the government increased the base tariff by Rs 5 per unit. This was followed by further increases in the quarterly tariff adjustment (QTA) and fuel cost adjustment (FCA).
The Power Division had wanted to increase the tariff by Rs 10 per unit, but the National Electric Power Regulatory Authority (Nepra) did not allow this.
The Secretary of Power, Rashid Langrial, said that the plan is approved by the federal cabinet and shared with the IMF.
