Caretakers eye cutting power prices for industries

ISLAMABAD: Muhammad Ali, the caretaker federal minister for energy, stated that the government was considering making a significant move by lowering industrial power rates.

Speaking to Geo News, the minister said that with five to six weeks remaining until the elected government could assume power, the caretaker government will complete a few major things.

Ali said the government was trying to lower electricity prices for industries because households were currently being subsidised by the industrial sector. He said the country could not function if it did not have an ample amount of dollars and there would not be employment and exports if the industries hit a snag.

The energy minister said the government was also working on reducing the circular debt, adding that efforts are also being made to bring down the urea prices, which were too high.

“The caretaker government would give a roadmap for the reduction in capacity payments and urea prices,” he said.

Pakistan's export industry, facing turbulence because of a challenging economic outlook, had urged the government to lower wheeling charges for using the national grid's power transmission and distribution infrastructure, The News reported on December 7, 2023.

Already burdened by a high tariff of 14 cents per unit, the industry had sought transition to a competitive trading bilateral contract market (CTBCM) regime. This would have enabled them to purchase electricity from independent power producers (IPPs) at lower rates.

On October 12, the World Bank had reiterated its commitment to support Pakistan's power sector reforms aimed at getting rid of mounting circular debt, The News reported.

This multilateral donor had announced that it would provide a comprehensive privatisation template to Islamabad aimed at expediting the privatisation process of the Power Distribution Companies (Discos).