Electricity prices skyrocket in 2024, consumers face steep increases
Business
Electricity prices skyrocket in 2024, consumers face steep increases
ISLAMABAD (Zeeshan Yousafzai) - Year 2024 has been a challenging year for electricity consumers in Pakistan, with major price hikes hitting both DISCO and K-Electric users.
Electricity rates increased by Rs39.25 per unit for DISCO customers and Rs26.11 per unit for K-Electric consumers.
According to data available to Dunya News, electricity prices were raised eight times throughout 2024, while they were reduced four times through monthly fuel cost adjustments.
The overall increase in fuel cost adjustments for the year amounted to Rs32.68 per unit. Additionally, quarterly adjustments saw prices rise four times, with an increase of Rs6.57 per unit. Meanwhile, electricity prices in Karachi saw an increase of Rs26.11 per unit.
The rising cost of electricity dominated news headlines throughout the year, putting significant pressure on the government. In response, the government formed a task force to negotiate with Independent Power Producers (IPPs) in an effort to reduce capacity payments and bring relief to consumers.
Federal Minister for Power Owais Leghari told Dunya News that talks with 17 IPPs would soon be completed, which is expected to lead to a reduction in rates. He added that, thanks to government efforts, the country managed to save consumers Rs1,000 billion this year.
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However, energy market experts argue that the government’s negotiations with the IPPs mainly benefited industrial consumers, with little relief passed on to domestic users, similar to the situation in 2023.
Despite the government's efforts to reduce electricity prices and lower the burden of capacity payments, mismanagement within the power sector remains a major issue.
In 2024, electricity distribution companies (DISCOs) failed to improve their performance, with none of them meeting the targets set by the National Electric Power Regulatory Authority (NEPRA).
This mismanagement resulted in a staggering loss of Rs596 billion to the national exchequer in just one year. NEPRA has raised serious concerns about the safety of the DISCO system, calling it dangerous. Tragically, 140 people lost their lives in incidents related to the unsafe infrastructure of these companies.
The government is moving forward with plans to privatise these distribution companies, but the process is expected to begin in 2025.
