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Cracking the Code: Tackling Pakistan’s Soaring Electricity Prices
Discover the multifaceted causes behind rising electricity prices in Pakistan and explore strategic solutions for sustainable, affordable energy.
Background of the Escalating Electricity Prices in Pakistan
Pakistan’s electricity sector has grappled with numerous challenges, resulting in significant price increases over the past decade. These challenges are multifaceted, encompassing structural inefficiencies, fiscal mismanagement, and geopolitical factors.
The country’s energy generation heavily relies on imported fossil fuels, particularly oil and gas, exposing it to global price fluctuations. The depreciation of the Pakistani Rupee against the US Dollar has exacerbated import costs, directly impacting electricity tariffs. Additionally, Pakistan’s outdated and poorly maintained electricity infrastructure leads to significant transmission and distribution losses, often as high as 20–25%. These losses necessitate higher tariffs to cover inefficiencies and recover costs.
A persistent issue in the sector is the circular debt, which arises when there is a shortfall in revenue collection from consumers compared to the cost of electricity production. This debt…
