Energy Minister Owais Leghari has disclosed a staggering increase in the cost of electricity from Independent Power Producers, revealing that the price of a unit, which was Rs 3 in 2016, has soared to Rs 285.
Speaking during a meeting of the Senate Standing Committee on Energy, chaired by Mohsin Aziz, Leghari highlighted the dramatic escalation in IPP costs. He announced that the government will cease purchasing electricity in the future, leaving consumers to buy power directly.
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 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.
