Govt Committed to Lowering Electricity Prices: Awais Leghari 2024

Federal Minister for Energy, Awais Leghari, emphasized on Monday that the government is making every effort to reduce electricity prices amid rising concerns over high power tariffs. Speaking to the media, Leghari stated, “We are actively addressing issues related to Independent Power Producers (IPPs) and the persistent problem of power theft within Distribution Companies (DISCOs).”

He highlighted that the government is in discussions with Chinese companies to explore potential solutions. “We are leaving no stone unturned in our quest to bring down electricity costs, carefully considering all relevant factors,” the minister added.

Earlier, in another media briefing, Awais Leghari disclosed that the government has presented its energy reform plans and long-term vision to China’s National Energy Administration. These discussions, he explained, are crucial for the future of Pakistan’s energy sector.

A significant focus of these talks is the re-profiling of a substantial debt amounting to $8.5 to $9 billion. According to Leghari, this debt restructuring is expected to result in lower electricity prices and a subsequent increase in demand for power. The government is hopeful that this move will bring much-needed relief to consumers.

Leghari also mentioned that Finance Minister Ishaq Dar, along with other senior officials, is in ongoing negotiations with Chinese financial institutions to secure investments in Pakistan’s energy sector. These investments could play a vital role in stabilizing the sector and reducing reliance on expensive energy imports.

One of the key elements of the government’s reform strategy involves converting existing electricity generation plants from imported coal to locally sourced coal. “This shift has the potential to drastically lower the per-unit cost of electricity,” Leghari noted. He specified that four coal plants, including the government-owned Jamshoro plant, are under consideration for this conversion. The expected outcome could see electricity costs dropping from the current rate of approximately 24 rupees per unit to about 8 rupees per unit.

The Minister further elaborated on efforts to phase out outdated furnace oil plants, which were established under energy policies from 1994 and 2002. He pointed out that this phase-out could result in significant annual savings, with an estimated financial impact of around 80 billion rupees.

Despite these promising initiatives, Leghari acknowledged the challenges posed by the devaluation of the Pakistani rupee and high-interest rates. These factors, he said, particularly affect capacity charges within the power sector, making the reform process more complex.

The government’s comprehensive approach to energy sector reform, including collaboration with international partners and a focus on leveraging local resources, reflects its commitment to providing affordable electricity to the people of Pakistan. As these initiatives progress, the hope is that consumers will soon experience the benefits of lower electricity bills, which could contribute to overall economic stability and growth.