Electricity to become cheaper by up to Rs5 after revised agreements with IPPs: Energy minister
Energy Minister Awais Ahmed Khan Leghari has announced that following revisions to agreements with Independent Power Producers (IPPs), electricity prices in the country are set to decrease by up to Rs5 per unit, reported Express News.
Speaking at a briefing session on the electricity facilitation package at the FPCCI office in Islamabad on Friday, he highlighted the crucial role played by the business community in propelling the country's economy.
"As an agriculturist, I must say, we are now also subject to a 45% tax. Pakistan has never followed a formula for cheap electricity in its history," Leghari stated. "Going forward, from the 17,000 megawatts, we have already purchased 7,000 megawatts of electricity," he added.
He pointed out that even among the 17,000 megawatts, 87 megawatts failed to meet the criteria for affordable electricity, adding, "There are no sacred cows in the power sector anymore."
The energy minister stressed that the government is bringing in the best talent from both the public and private sectors.
"We’ve already shut down five IPPs, and are working on initial steps with 11 more IPPs. In the future, no new IPPs will be set up in Pakistan. This is a revolution, and revolutions like this don’t happen on D-Chowk," he added.
Leghari also revealed that agreements have been made with the BEGAS power plants, and noted that IPPs had been informed that if electricity prices remained so high, no one would be willing to buy it. He confirmed that after revising the IPP contracts, electricity could become 5 rupees cheaper.
Regarding the winter package, Laghari clarified, "The winter package is simply a facilitation package and has nothing to do with the season." He also pointed out that at present, no other country in the region is paying 26 rupees per unit for electricity.
"We are heading to the Cabinet next week, and will inform them that the government will no longer purchase electricity. Very soon, you will see an announcement confirming this," Laghari stated, emphasizing that it was not the government's role to buy electricity. "There's this widespread myth that hydropower is cheap. Who ever said hydropower is cheap?" he added.
Laghari also mentioned that in the first four months of the current fiscal year, the DISCOs incurred a loss of just 11 billion rupees, whereas they were permitted to lose up to 350 billion rupees during this period.
"The performance of Discos has improved after the appointment of Board of Governors. Over the next 10 years, we are projected to buy electricity worth 40 trillion rupees, but the measures we are taking will reduce this amount to 32 trillion rupees," Laghari concluded.