In the field of power transmission, underground cables are subjected to various factors that influence their load capacity. One such significant factor, often overlooked, is the extreme environmental conditions prevalent in certain geographical regions. This study particularly focuses on regions where summer temperatures exceed 50℃ and the soil, due to excessive dryness, exhibits high thermal resistivity. The current study explores the impact of these harsh environmental conditions on the current-carrying capacity (ampacity) of underground power cables. A derating factor for dry zone formation around these cables has been proposed, calculated for various types of native soil. The standard IEC-60287 has been adhered to as a reference for these calculations. The software ANSYS has been employed to compute the temperature distribution around the cables in different types of soil, using relevant experimental data. The results indicate that the formation of dry regions in the soil begins at differing temperatures and rates depending on the soil's composition. This study thus underscores the critical role of environmental factors and soil conditions in determining the ampacity of underground power cables. It also highlights the necessity of incorporating these factors into design considerations for optimal cable performance.