Gujarat government raised fuel surcharges by 20 paise to Rs 2.50, applicable on every unit of electricity consumed, for the fourth time in the last five months. This hike will impact electricity bills of all categories of consumers with the exception of agricultural consumers.
The increase in Fuel and Power Purchase Price Adjustment (FPPPA) Charges, also known as the fuel surcharge, will take effect on May 1, 2022, and will be recovered from consumers’ electricity bills in May and June 2022, according to state-run Gujarat Urja Vikas Nigam Limited (GUVNL).
FPPPA has been raised after Gujarat Electricity Regulatory Commission (GERC) headed by former chief secretary Anil Mukim gave approval for the same.
“In this regard, it is to state that GUVNL is in receipt of approval from Honorable GERC allowing recovery of additional FPPPA of Rs 0.2 per unit, out of unrecovered FPPPA of financial year 2021-22, effective from May 1, 2022,” stated an official communique to the four state discoms on Wednesday.
“In view of the above, it is requested to recover FPPPA at Rs 2.5 per unit from all categories of consumers except agricultural consumers as the government is providing subsidy for the FPPPA charges applicable to agricultural consumers,” the release adds.
With the latest hike in fuel surcharge, a residential consumer in Gujarat who paid Rs 1.8 per unit as FPPPA charges in electricity bill for May-June 2021, will now be paying Rs 2.5 per unit which is an increase of 70 paise per unit in the electricity bill.
Gujarat government has been forced to increase fuel surcharges as increasing power tariffs could become politically sensitive, especially in a year when assembly elections are due in Gujarat.
The order for FPPPA increase passed by GUVNL is applicable across Gujarat except parts of cities like Ahmedabad, Gandhinagar, Surat and Dholera SIR where Torrent Power is supplying power.
Torrent will charge Rs 2.31 per unit for customers in Ahmedabad and Gandhinagar, and Rs 2.27 per unit for customers in Surat. FPPPA charges for Torrent Power customers were Rs 2.11 per unit in Ahmedabad and Gandhinagar, and Rs 2.07 per unit in Surat last year.
Despite having an electricity generation capacity of close to 37000 Megawatts (MW), Gujarat has been forced to purchase expensive power from power exchanges and private power producers this summer due to peak demand of 20,000 MW.
Expensive coal and high natural gas prices have also contributed to the crisis.