Federal Minister for Energy Owais Ahmad Khan Leghari Highlights Burden of Energy Sector Debts on Consumers

Islamabad:Federal Minister for Energy, Owais Ahmad Khan Leghari, has highlighted that the burden of energy sector debts is being passed on to electricity consumers.

The federal minister mentioned that the cost of electricity generation is Rs. 8 to 10 per unit, whereas transmission charges are between Rs. 1.5 to 2 per unit, and DISCOs incur expenses of Rs. 5 per unit.

Owais Leghari stated that the largest expenditure, Rs. 18 per unit, is due to capacity charges. He emphasized that whether these plants are operational or not, they will continue to charge you as if they were running.

Regarding the Sahiwal Coal Power Plant, the federal minister for energy said that in 2015, the capacity charges were Rs. 3 per unit, but due to increases in the dollar exchange rate and interest rates reaching up to 22%, the capacity charges have risen to Rs. 11.45 per unit.

He informed that currently, the burden of energy sector debts is being borne by electricity consumers. Due to the increase in electricity rates, there has been a decrease in electricity usage, and currently, the electricity rate is Rs. 35 per unit without taxes.

The Energy Minister stated that there will be a 3 to 5% reduction in electricity rates starting from January. Severance packages of Rs. 7 billion are being given to closed plants, and distribution companies are facing an annual loss of Rs. 550 to 600 billion. In the next two to three years, all DISCOs except for tribal areas and Balochistan will be handed over to the private sector.

Owais Leghari also mentioned that due to inflation and interest rate fluctuations, electricity rates fluctuate. Last week, there was an increase of Rs. 7 per unit in electricity rates. Since 2019, the government has not artificially increased electricity prices to save itself from political losses. This recent increase in electricity rates occurred three to four years later.

It should be noted that a few days ago, it was revealed that the government is collecting money from electricity consumers under seven different types of taxes.

On the other hand, former Federal Minister Gohar Ijaz had written a letter to Energy Minister Owais Leghari demanding the disclosure of IPPs data. Gohar Ijaz stated that the facts he is highlighting are true, emphasizing that 48% of IPPs are owned by 40 large families, operating with a 50% capacity and obtaining a full 100% price. He had said that the actual price of electricity is unjustifiably being charged at Rs. 60 instead of Rs. 30 per unit. Earlier, Gohar Ijaz had said that billions in capacity charges are being received not only by IPPs but also by government electricity houses, to which Owais Leghari responded that IPP contracts have a government guarantee that cannot be revoked, and the government is auditing contracts to determine which IPPs are not benefiting.