Pakistanis are facing a daunting challenge of soaring electricity bills and sky-high inflation. The recent increase in electricity prices, as a result of the International Monetary Fund (IMF) loan program, has pushed annual inflation to a staggering 27.4%. This has taken a toll on the livelihoods of many low-income groups in the country, leaving them struggling to make ends meet.
The surge in electricity bills has significantly reduced disposable income, making it difficult for people to afford basic necessities and healthcare expenses. As a result, citizens have taken to the streets in protest, burning electricity bills in a display of frustration and helplessness.
Several factors contribute to the rising cost of electricity in Pakistan. Firstly, the cost of non-renewable fuel resources such as gas, furnace oil, diesel, and coal play a significant role. The depreciation of the Pakistani rupee against the US dollar has also made imported fuel more expensive, adding to the overall electricity costs.
Furthermore, Pakistan’s power sector faces significant challenges, including arrears and power outages. The arrears, which accumulate due to subsidies and unpaid bills, have reached billions of rupees, adding to the country’s debt burden. Theft in the power sector is also a prevalent issue that needs to be addressed.
The reliance on Independent Power Producers (IPPs) for thermal power generation also contributes to the high cost of electricity. Critics argue that the contracts with these private entities are skewed in favor of the companies, leading to exorbitant profits and dividends. Capacity payments made to IPPs, even when power generation is not fully utilized, further add to the production costs for factories and industrial units.
To alleviate the burden on citizens, financial experts recommend a focus on reducing electricity prices through the promotion of alternative energy sources. This would ensure a diversified and sustainable energy mix, easing the pressure on the power sector and providing some relief to the common people.
Overall, the struggle to keep the lights on in Pakistan is deeply intertwined with the broader issue of rising inflation and the need for comprehensive reforms in the power sector. Addressing these challenges will require a multi-faceted approach that prioritizes affordability, sustainability, and efficiency in the country’s energy landscape.
– Arab News: Pakistanis struggle to keep the lights on amid record electricity bills, sky-high inflation