Electricity price

Letter August 16, 2024
Electricity price

KARACHI:

Prime Minister Shehbaz Sharif’s recent promise to reduce electricity bills has been welcomed as a glimmer of hope in a country burdened by soaring energy costs. However, mere promises will not suffice as Pakistan urgently needs long-term action to address an energy crisis that has been festering for decades. Without a significant reduction in electricity costs, the lifeblood of Pakistan’s economy — its industry, agriculture, and exports — will continue to stagnate.

The government must confront the harsh realities of its past failures head-on. For nearly fifteen years, Pakistan’s energy sector has suffered from poorly conceived policies and a chronic lack of foresight. Successive governments have repeatedly opted for cosmetic solutions that do little more than cover up the cracks. The result is a nation on the brink, with an energy sector buckling under the strain of its own inefficiencies. The root causes of Pakistan’s energy woes are not unknown. The exorbitant prices that consumers are forced to pay are the direct result of decades of mismanagement, exacerbated by crippling IPP contracts that have drained billions from the public purse. These contracts, along with an outdated and deteriorating transmission infrastructure, have created a perfect storm of inefficiency and waste. The burden of these systemic failures is then passed on to consumers, who are left to bear the cost of the government’s incompetence.

The stakes could not be higher. Pakistan’s circular debt in the power sector has ballooned from 1,148 billion rupees in June 2018 to over 2,655 billion rupees today. If the government continues to rely on stopgap measures and empty promises, the consequences will be dire.

Gulab Umid

Turbat