The chairman of the Economic Policy and Business Development Think Tank and former caretaker minister, Gohar Ejaz, has emphasized the urgent need for reforms in Pakistan’s energy sector. Comparing Pakistan’s electricity tariffs with those in regional countries, he highlighted the burden faced by industries and called for immediate action to slash electricity prices.
Pakistan’s industrial electricity rates are alarmingly high compared to other nations. Industries in Pakistan currently pay Rs. 44.56 per unit for electricity. In stark contrast, electricity costs in Egypt are Rs. 10.58 per unit, and in Turkey, they stand at Rs. 16.43 per unit. Similarly, the industrial rates in Bangladesh are Rs. 20.89 per unit, while in India, industries are charged Rs. 23.39 per unit. Even countries like Vietnam and Sri Lanka have more manageable power prices at Rs. 23.67 per unit. These figures underline the immense competitive disadvantage faced by Pakistan’s industries due to exorbitant electricity costs.
Ejaz urged the government to take immediate measures to bring electricity prices down. He proposed a fixed rate of Rs. 26 per unit for all consumers, making it more affordable and competitive for businesses. Stressing the importance of systemic changes, he called for a thorough review of the agreements with independent power producers (IPPs). He also recommended halting payments to IPPs that are not generating electricity, ensuring that resources are utilized effectively.
The former minister also highlighted the inefficiencies within the power distribution companies. He strongly advocated for the privatization of those companies that are consistently operating at a loss. According to Ejaz, privatization could lead to better management, improved service quality, and reduced financial strain on the national economy.
With soaring electricity costs pushing industrial production expenses to unsustainable levels, Ejaz’s call for action comes at a critical time. Lowering electricity rates is not just a matter of economic relief; it is essential for reviving the industrial sector, boosting exports, and ensuring that Pakistan remains competitive in the global market.
The proposed reforms, if implemented effectively, could provide much-needed relief to businesses and contribute to overall economic growth.
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