IT is a matter of grave concern that the energy sector is as vulnerable today as anytime before despite a record increase in tariff that is not only highest in the region and makes our products uncompetitive in the international market but also beyond the absorbing capacity of the general public. As people are protesting repeated hikes in electricity and gas tariffs, the Government is reportedly preparing to introduce a new power tariff envisaging an increase for the existing protected category of consumers and diverting subsidies to industrial, export and commercial consumers to help boost economic activities in the country.
The electricity tariff has become one of the major woes of the common man and the authorities justified upward revisions on the plea of addressing the chronic issue of circular debt but it has risen further to Rs 2.7 trillion. It is because of the menacing dimensions of the circular debt that the Government is continuously defaulting on payments to the IPPs, which are now threatening to invoke sovereign guarantees. What a tragedy that the country has a huge surplus in electricity generation capacity but despite this people are witnessing long duration load-shedding and that too during winter when demand falls to the minimum. Independent experts argue that increase in tariff is part of the problem and not a solution and therefore, the Government should review its strategy for the short and long term interests of industrial, commercial and the domestic consumers. There is need for proper and well-thought-out strategy to make due investment in the sector particularly to improve and upgrade transmission and distribution networks to increase efficiency/performance and minimize losses; focus on renewable plants; prevent widespread theft and sort out the capacity payment controversy as it has become a major drain on resources. Pakistan has huge potential to generate enough energy from solar and wind resources to take care of its needs, saving huge foreign exchange currently being spent on import of fuel and bringing down the unrealistically high tariff. Further upward adjustment in power tariff for any category of consumers would be suicidal.
