Islamabad : Dr. Murtaza Mughal, President of Pakistan Economy Watch (PEW), says the maladjusted power sector is bankrupting both the public and the productive sectors.
In March, consumers will end up paying an additional Rs7 per unit on top of the standard cost, which will be another serious blow for them, he said.
He said that investors and consumers in the solar sector are being discouraged steadily to benefit IPPs, which should be stopped.
Dr. Murtaza Mughal said in a statement issued here today that earlier, electricity bills used to decrease in the winter, but now they are continuously increasing in this season as well.
Now, preparations are being made to charge consumers an additional seven rupees and thirteen paisa per unit in the month of March in the name of a fuel cost adjustment (FCA). This increase will be imposed on the masses against electricity consumed during the month of January.
The rising cost of insurance due to Houthi raids in the Red Sea is one of the reasons given for the higher FCA. Higher diesel and petrol prices are also cited as contributing factors, but policymakers should consider that it is becoming intolerable for consumers.
The main problem is that almost all consumers cannot afford the high cost of electricity, but instead of reducing theft, corruption, mismanagement, and incompetence in the power sector, the policy of continuously increasing electricity rates is being followed, which is having a very negative impact on the masses and the economy.
He said that people are being charged more than they can afford, which is an injustice. On the other hand, the policy of discouraging investors and users of solar energy is also going on vigorously, he observed.
Investors and the public have invested billions of rupees in this sector, for which they are being punished, which is deteriorating the investment environment.
Dr. Mughal said that net metering was provided to solar consumers so that they could sell surplus power to the government. Now the profits of these consumers are being continuously reduced to push people back to expensive electricity instead of solar energy.
Such a radical change in government policies scares investors and makes them reluctant to invest in Pakistan. Due to such measures, investment in the country has remained negligible.
Dr. Mughal said that the disastrous effects of IPPs have caused irreparable damage to the country’s economy, but despite this, the influential people in every government are supporting IPPs to reap benefits.
The problem is that succeeding administrations have failed to implement crucial structural reforms. Furthermore, a great deal of new IPPs are being started without consideration for the macroeconomic realities of the nation.
He noted that the private sector is trying to install more and more power plants with the help of politicians, which is very damaging to the country.
The continuous increase in the price of electricity leads to an increase in theft and a decrease in its use, and people start choosing other ways, which leads to problems in capacity payments to IPPs, but no government is ready to initiate reform in this regard, he observed.
