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Express Tribune
22-02-2025
- Business
- Express Tribune
Short-term inflation rises 0.27% WoW
Listen to article The Sensitive Price Indicator (SPI) for the period ended February 20, 2025 recorded a week-on-week (WoW) increase of 0.27%. On a year-on-year (YoY) basis, the SPI rose 1.2%, reflecting mild inflationary pressures compared to previous weeks. The increase was driven by price hikes in essential food items, which included bananas (11.89%), eggs (7.80%), chicken (4.47%), garlic (1.08%), sugar (0.65%), beef (0.52%), cigarettes (0.49%), mutton (0.22%), pulse masoor (0.15%) and washing soap (0.07%). Conversely, a notable decrease was observed in prices of tomatoes (2.81%), diesel (1.49%), pulse gram (1.24%), onions (1.16%), potatoes (0.90%), pulse mash (0.60%), LPG (0.58%), petrol (0.36%), broken Basmati rice (0.34%), vegetable ghee (0.32%) and pulse moong (0.30%). During the week ended February 20, out of 51 monitored items, prices of 11 items (21.57%) increased, 16 items (31.37%) decreased and 24 items (47.06%) remained stable. The YoY increase of 1.21% in the SPI was fuelled by significant price spikes for items such as ladies' sandals (75.09%), pulse moong (28.07%), pulse gram (26.20%), powdered milk (25.84%), bananas (24.15%), beef (22.47%), potatoes (20.71%), garlic (19.18%), vegetable ghee (16.41%), Q1 gas charges (15.52%), shirting (14.11%) and firewood (12.73%). However, a substantial decline was noted in prices of tomatoes (58.82%), onions (49.86%), wheat flour (37.05%), chilli powder (20%), Q1 electricity charges (18.92%), pulse mash (12.03%), pulse masoor (11.43%), broken Basmati rice (9.15%), diesel (8.07%), Irri-6/9 rice (7.60%), petrol (6.97%) and LPG (1.32%). The 1.2% YoY increase reflects a relatively stable inflationary trend, which is significantly lower than the double-digit growth observed in mid-2024. This suggests a gradual easing of inflationary pressures, though volatility remains in certain essential commodities. Arif Habib Limited wrote in its report that headline inflation for February 2025 would fall to a 112-month low of 2.2% YoY, down from 2.4% in January 2025. On a month-on-month (MoM) basis, inflation is projected to decline 0.21%, marking the lowest reading since October 2015, when it stood at 1.61%. For the first eight months of FY25 (8MFY25), average inflation is estimated at 6.04%, a significant drop from the 28% pace recorded in 8MFY24. Food inflation is expected to decrease 1.1% MoM and 2.6% YoY, primarily driven by MoM lower prices of staples, including wheat flour (-1.6%), eggs (-10.8%), potatoes (-22.2%), onions (-24.9%) and tomatoes (-51.7%). The housing and energy index is projected to dip 0.3% MoM, mainly due to a 1.3% decrease in electricity prices. This drop reflects the impact of negative fuel cost adjustment (FCA) of Rs1.23 per kilowatt-hour for December 2024, which would be passed on in February 2025 bills compared to a negative FCA of Rs0.76 in the previous month. Meanwhile, the transport index is expected to rise 1.1% MoM, caused by an increase in petrol and diesel prices. However, on a YoY basis, it will stay 0.3% lower, reflecting a high base effect in the previous year. These consecutive months of low YoY inflation is largely attributed to the high base effect, supported by declines in food and housing indices. Looking ahead, if global commodity and energy prices remain stable and the Pakistani rupee holds steady, they will further support the inflation outlook, helping to keep price pressures contained.
Express Tribune
16-02-2025
- Business
- Express Tribune
Karachi power consumers denied big relief
Listen to article KARACHI: Karachi Chamber of Commerce and Industry (KCCI) President Muhammad Jawed Bilwani, while strongly condemning the recent decision of the National Electric Power Regulatory Authority (Nepra) which deprives Karachi consumers of a significant relief in monthly tariff adjustment, has said that both Nepra and K-Electric (KE) have failed to provide promised benefits to the consumers. He said Nepra's recent announcement of fuel price adjustment for November revealed a mere reduction of Rs1.23 per unit. "Although this reduction should be seen as a step in the right direction, it falls far short of expectation. Karachi consumers were expecting a much higher relief, given that KE had previously requested a reduction of up to Rs4.98 per unit for November." He added, "What is even more concerning is the fact that despite the tariff cut being calculated at Rs5.0029 per unit, only Rs1.23 reduction was made for K-Electric consumers. This adjustment left pending a substantial benefit of Rs5.444 billion." He said both Nepra and KE failed to uphold their commitment to providing consumers with a significant relief during current difficult times. "Karachi consumers, already burdened by the high cost of living and doing business, are now being further victimised by this injustice. Nepra, which is responsible for protecting the rights of electricity consumers, has fallen short of its mandate by not ensuring that full benefit is passed on to consumers. KE, on the other hand, continues to benefit from these unjustified delays in tariff reduction," he lamented. While expressing concern over the lack of transparency in the regulatory process, Bilwani said it was highly disturbing that Nepra, after a thorough analysis, failed to enforce the full tariff reduction. "K-Electric's failure to provide the full benefit of Rs5.444 billion, which could have alleviated the financial burden on people, is nothing short of economic betrayal," he remarked. He urged both Nepra and KE to take immediate corrective action and ensure that the full benefit of tariff adjustment was passed on to consumers without further delay. He also called for greater accountability from both organisations to ensure that consumer rights were safeguarded, particularly in the current challenging economic conditions. "We demand that Nepra and K-Electric not only correct this oversight but also ensure that any future adjustments are transparent, fair and directly benefit people. The business community and citizens of Karachi deserve something better and we will continue to fight for their rights," he said. Meanwhile, he referred to the dissenting opinion expressed by Nepra Member (Tariff) Mathar Niaz Rana, seconded by Member (Technical) Rafiq Sheikh, who had opposed the limited relief provided to KE consumers. In his dissent, Rana argued that consumers should have been granted the full benefit of November adjustment, amounting to a reduction of Rs5.0029 per unit, which would have resulted in a direct benefit of over Rs7.215 billion. "The KCCI fully supports Mathar Niaz Rana's dissenting view. His position represents the voice of Karachi business community and consumers, who are being unfairly burdened," he said, adding that Rs8.7 billion was still under consideration by the authority and yet to be finalised. As of now, Nepra has put the decision on hold, "which is really unusual", he noted.
Express Tribune
13-02-2025
- Business
- Express Tribune
Power tariff goes down by Rs1.2 per unit
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Wednesday asked the State-owned power distribution companies (DISCOs) to refund Rs1.228 per unit to the consumers in their bills for the month of February 2025, on account of the monthly fuel charges adjustments (FCA) for December 2024. The decision was taken on a petition from the Central Power Purchasing Agency (CPPA), seeking permission to refund Rs1.0353 per unit. However, Nepra, after holding a public hearing on January 30, assessed a national average uniform decrease of Rs1.23 per unit in the applicable tariffs for DISCOs. This downward adjustment would apply to all consumer categories, except the lifeline consumers, domestic consumers consuming up-to 300 units, electric vehicle charging stations (EVCS), pre-paid consumers in all categories, and the agriculture consumers of all the XWDISCOs. The regulator also clarified that the negative adjustment on account of the monthly FCA was also applicable to the domestic consumers having Time of Use (ToU) meters, irrespective of their consumption level. In its decision Nepra also clarified that if the electricity bills for February 2025 had already been issued before the official notification of its latest decision, the adjustment would be applied in the bills for the following month – March 2025. Similarly, for K-Electric, the regulator approved a negative FCA of Rs1.23 per unit for November 2024, which would be reflected in bills for February 2025. If any February 2025 bills had been issued before the official notification, the adjustment would be applied in the following month. The FCA for K-Electric was approved on a provisional basis and subjected to adjustment, once Nepra finalised the utility's Multi-Year Tariff (MYT) for 2024-30 period. Any cost differences arising from the MYT determination would be incorporated into the future adjustments, the regulator stated. Nepra Member Tariff Mathar Niaz Rana in his additional note said that the regulator had approved a negative FCA of Rs1.23 per unit for the K-Electric's November 2024 billing, which was significantly lower than the Rs4.98 per kilowatt hour (kWh) requested by the utility. NEPRA determined that K-Electric's actual FCA should be negative Rs5.00 per kWh, or Rs7.21 billion cumulatively, but withheld Rs5.44 billion pending scrutiny of Rs8.7 billion in costs related to part load, open cycle operations, degradation curves, and start-up costs under the K-Electric's MYT. Some officials argued that the full FCA relief should be passed on to the consumers, as anticipated after the public hearing. Nepra would decide later whether to adjust the withheld amount upfront or stagger it over future FCA determinations. Quarterly adjustment Meanwhile, the consumers are also set to enjoy another relief because of the cut of up to Rs2 per unit in power tariff that amounts to Rs52 billion, on account of second quarterly adjustment for the ongoing financial year. After holding a public hearing chaired by Nepra Chairman Waseem Mukhtar, the regulator hinted on Wednesday at directing DISCOs, including the K-Electric to refund over Rs52 billion to the electricity consumers under the second quarterly adjustment for the outgoing fiscal. During the hearing, the regulator examined the key components of the adjustment, with officials highlighting that the major portion of the proposed relief stemmed from a reduction in the capacity payments.
