ISLAMABAD: Energy Minister Owais Leghari on Tuesday announced that the government will cease purchasing electricity in the future, leaving consumers to buy power directly.
This was followed by him revealing a staggering increase in the cost of electricity from Independent Power Producers (IPPs), wherein he pointed out that the price of a unit, which was Rs3 in 2016, has soared to Rs285 today.
Speaking during a meeting of the Senate Standing Committee on Energy, chaired by Mohsin Aziz, Leghari highlighted the dramatic escalation in IPP costs.
During the meeting, committee chairman Mohsin Aziz voiced concerns over IPP-related issues, questioning the details of contracts, capacity charges, and the underutilization of plants running at less than 70-80% capacity. He emphasized the committee’s agenda to provide relief to the public and scrutinize the rates agreed upon when these IPPs were established.
Leghari committed to providing detailed information in the next meeting, assuring transparency in government dealings. He also requested a private briefing session to discuss sensitive information.
Senator Shibli Faraz expressed a desire to investigate potential fraud by IPPs, criticizing the high cost of electricity production in Pakistan compared to the region. He accused the Ministry of Energy of mismanagement.
The Energy Secretary added that while the country can theoretically generate 236 billion units of electricity, actual production is limited to 132 billion units annually due to low demand. He clarified that payments to IPPs are based on terms rather than installed capacity, noting the shutdown of several plants.
Leghari further noted that Karachi Electric (KE) receives a significant government subsidy to align its tariffs with national levels. He warned that electricity prices are expected to rise between 2025 and 2027 as new projects come online.
