By Hasnain Aulakh
Pakistan’s economic woes worsen with soaring unemployment, poverty, and inflation, compounded by new taxes in utility bills, stagnant incomes, and limited resources, pushing citizens to the brink.The Punjab Government has unveiled a Rs. 45 billion project to reduce electricity costs by Rs. 14 per unit for 2 months, benefiting customers who consume between 200-500 units.
Punjab’s electricity relief decision sparks contrasting reactions: Sindh, KP, and Balochistan seek relief from the federal government, while political leaders target PML-N and Nawaz Sharif. Hafiz Naeem demanded tariff revision and an end to IPPs’ capacity payments. He questioned Sindh’s Rs. 3000 billion budget, asking why Karachi’s taxpayers, who fuel the economy, get no relief, unlike Punjab’s two-month tariff cut.Hafiz Hamdullah and Mustafa Kamal criticized Nawaz Sharif’s electricity price cut for only benefiting Punjab, suggesting it exposes his provincial bias. They argued for a nationwide reduction, with Kamal calling the move politically damaging for Nawaz Sharif.
Mayor Karachi, Barrister Murtaza Wahab, revealed a plan to permanently reduce electricity rates from Rs. 77 to Rs. 3 per unit by addressing specific IPP areas. He proposed a joint federal-provincial government investment of Rs. 128 billion (Rs. 64 billion each), enabling citizens to receive electricity at a permanent rate of approximately Rs. 44-45 per unit.”KP’s Finance Advisor, Muzamil Aslam, said Punjab’s resources rival those of the entire country, with a budget of Rs. 3800 billion, exceeding the federal government’s.
Electricity bills feature two types of taxes: ISCO charges (fuel price adjustment, financial costing surcharge, and QTR tariff adjustment) and government charges (TV fee, GST, income tax, additional FPA tax, and outstanding amounts). Additional bill adjustments and fluctuations in dollar value or inflation further escalate the costs, leading to soaring bills and public outcry amidst the multitude of taxes.
Electricity companies will collect Rs. 46.99 billion from consumers through capacity charges, transmission losses, line repair, and system usage fees. Notably, if implemented immediately, the tax burden will disproportionately affect consumers outside Punjab, who will bear Rs. 47 billion, whereas Punjab will bear only Rs. 2 billion for the initial two months.
IPPs received billions in capacity payments without generating electricity, sparking demands for contract termination. Despite government efforts to reduce bills and terminate contracts, soaring electricity costs have pushed citizens to desperation, raising concerns of a potential crisis and unrest, similar to Bangladesh and Sri Lanka, if left unaddressed.
Through China-Pakistan collaboration, we’ve launched projects like the Sahiwal Coal Power Plant, generating 1320 MW at Rs 20-22 per unit. This CPEC and BRI flagship project was completed in 22 months, using supercritical technology and eco-friendly ESP and FGD systems.The Pak Matiari-Lahore Transmission Line is a 660 kV HVDC project, 880 km long, with 4000 MW capacity, completed in 2021 at $1.5 billion, with negligible line losses of 2.96-4.21%.
We should leverage the technological advancements and capabilities of our iron brother, China, to collaborate on more projects that provide affordable electricity to our people, alleviating their hardships and improving their quality of life.
