Kerala’s December 2025 Fuel Surcharge Stays Modest
KSEBL has announced a moderate fuel surcharge for December 2025, highlighting the continued stability of Kerala’s automatic monthly fuel cost recovery system. The adjustment is based on the difference between approved and actual variable power purchase costs during October 2025 — a month that showed both upward and downward deviations across generating stations.
A Stable Outcome Under KSERC’s Monthly Mechanism
As per the surcharge certificate issued on November 28, 2025, KSEBL will recover 5 paise per unit from monthly-billed consumers and 8 paise per unit from bimonthly consumers. The calculation follows Regulation 87(5) of the KSERC Tariff Regulations (First Amendment, 2023), which governs Kerala’s automatic monthly fuel surcharge adjustments.
The mechanism ensures that fluctuations in fuel and procurement costs are passed through gradually, avoiding sudden tariff shocks for consumers.
Mixed Deviations Across Stations Shape the Final Number
The October 2025 data reveals a varied pattern of station-wise variable cost deviations: Some generating stations recorded positive deviations, indicating higher actual fuel costs than the approved benchmarks. Others, especially certain coal-based CGS units, posted negative deviations, meaning their actual variable charges were lower than expected.
CGS stations contributed the majority of the net deviation, with IPP units influencing the calculation to a smaller extent. The combination of these offsets kept the December surcharge modest.
A Predictable Framework Anchoring Tariff Stability
Kerala’s fuel surcharge framework factors in: • Current-month deviations • Carry-forward adjustments from past months • Demand approvals and energy sales assumptions • Category-wise ceilings prescribed by KSERC
This layered approach maintains tariff predictability while ensuring that KSEBL’s revenue remains closely aligned with its real procurement costs.
Limited Consumer Impact, Stronger Utility Cash Flow
For consumers, the impact of a 5–8 paise per unit surcharge is minimal in the broader tariff context. For KSEBL, the adjustment is essential to avoid delayed cost recovery, strengthen cash-flow discipline, and prevent under-recovery from accumulating over time.
A Signal of Procurement Stability
Despite fluctuations in coal prices and plant-level performance, the October procurement pattern appears relatively steady. The December surcharge underscores how Kerala’s automatic mechanism smooths short-term volatility — safeguarding both consumers and the utility’s financial health.
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