Energy minister admits to high electricity costs

Increase of 2 to 9 percent in current price to be effective for coming six months

PAKISTAN:

The federal minister for energy on Thursday admitted in the upper house of parliament that electricity has become costly for common people. However, he also hoped that if things went smoothly, the price of electricity would go down by January next year.

Answering questions during a Senate session, Federal Minister for Energy Owais Leghari informed the house that there is news circulating about an increase in electricity prices by Rs6 per unit.

He said every June, the regulator—the National Electric Power Regulatory Authority (Nepra)—sets the average price for the year.

“This June, the regulator proposed an average increase rate, which was considered by the federal cabinet. The government has absorbed a burden of Rs440 billion to keep the unit price increase to Rs5.76,” he added.

According to Leghari, there will be an increase of 2 to 9 percent in the current price for the coming six months. If the interest rates do not rise and the dollar remains stable, the price per unit will decrease by 2 to 3 rupees in January next year, he added.

The minister said the burden on the industry has been reduced by Rs150 billion while currently, 25 million consumers are paying less than the average cost of electricity which is Rs35 per unit. He said some consumers are even paying Rs7 to Rs15 per unit.

He acknowledged that the electricity price is high but assured that after reforms over the next one to one and a half years, the government will be in a position to provide cheaper electricity.

“In the future, 10,000 megawatts of hydropower will be added. The privatization process of power sector companies will be completed in the next one and a half years,” he said.

Talking with reference to the power crisis in Balochistan, the minister said there are 28,000 legal and 12,000 illegal agricultural connections in the province. He said in some areas of Balochistan, recovery rates are low, while in other areas, the situation is better.

“Our annual losses amount to Rs600 billion,” he said.

Leghari said providing 9 to 12 hours of electricity to agricultural tube wells in Balochistan costs Rs80 billion annually.