After Petrol, Diesel Price Hike, Power Bills To Rise? All You Need To Know

Many households are likely to have to pay much more for electricity after petrol and diesel prices have increased recently and are set to do the same for CNG. The Central Electricity Authority (CEA) has suggested increments in the monthly electricity rates, which would push up electricity bills even if the consumption is not high. The plan is to boost the revenue of power distribution companies (discoms) which are facing critical losses due to the increasing adoption of rooftop solar systems among consumers and the growing dependence on captive power generation by industries.

Will electricity prices increase soon? 

According to a report by The Times of India, the Central Electricity Authority (CEA) is proposing to hike down the monthly electricity bills, which could lead to hike in power bills even for those who consume less electricity. The shift will lead to higher bills for low electricity users.

Customers would be charged more each month even if they don’t use much electricity, if the fixed electricity charge is higher. The proposal headed to the Forum of Regulators points out something pretty basic: power companies mostly recover their fixed costs by charging for every unit of electricity, not through steady monthly fees. So when people use less electricity, their revenue takes a hit.

CEA Proposal To Increase Fixed Electricity Charges

According to the report, things like running transmission lines, paying staff, keeping the network up, and paying power generators make up almost half, the numbers range from 38% to 56% of what these utilities spend. But only about 9% to 20% of their revenue comes from fixed monthly charges.

The CEA made another interesting observation. Even as industries and wealthier households set up rooftop solar panels, use open-access systems, or run their own power plants, they still count on the grid for backup. They’re buying less power from the companies, but still need the infrastructure, and that drags down utility revenues.

Increase in petrol prices

After days of speculation, the government has finally raised petrol and diesel prices by Rs 3, the first increase for retail buyers in four years. The change takes effect on Friday, May 15.

Hike in CNG prices

CNG prices aren’t spared either. In Delhi, CNG now costs Rs 79.09 per kg, up by Rs 2 from the previous Rs 77.09. Just a day earlier, Mumbai saw a similar increase, with CNG now at Rs 84 per kg across the entire Mumbai Metropolitan Region. 

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