The cost of electricity is the single largest component of the cost of electric supply by licensees to the consumers.Almost 95% of the electricity generated by licensees in Cambodia use Diesel/HFO as fuel. The cost of electric supply is related to the cost of Fuel. In order to reflect the change in the cost of fuel in the Tariff for consumers in a simple and transparent manner, EAC implemented Fuel Cost Adjustment mechanism in the Tariff of licensees. Under this mechanism the tariff for different slab rates of fuel is determined after public consultation, So that for only a change in the cost of fuel, the corresponding tariff could be fixed by EAC without the need of further public consultation. The cost of generation from hydro power plant, purchase from neighboring country or from other licensees did not fluctuate much. Hence the tariff for licenses getting electric supply from such sources did not have frequent fluctuations and approved the tariff without any price variation mechanism.