Electricity Price Hike
July bills are expected to skyrocket with electricity price per unit reaching Rs. 30 after tariff hikes.
Pakistan's energy crisis is expected to exacerbate, with the recent price hike. The government has taken this action in an effort to address the circular debt, which is a major concern for the International Monetary Fund. To put it simply, the government cannot afford to pay for the tariff differential subsidies anymore and is instead shifting the burden onto electricity consumers. In Pakistan, the electricity bill has intriguing layers that the government appears to be inflating to maximize revenue from its citizens. Let’s understand what constitutes the price of electricity.
For starters, the power purchase price is a constituent of the energy purchase price and the capacity purchase price. The breakdown of this contribution can be seen in the graph below (way below actually). Recent price hikes include an increase of Rs 4.96 per unit in the national average tariff. This aims to generate Rs 3.98 trillion during the fiscal year 2024. On top of it, additional fuel adjustment costs will increase the bill by Rs. 1.9 per unit.
Since 2006, Pakistan's dependence on imported oil has been a cause of concern. The realization that thermal power was only sustainable in the presence of external support, has raised apprehensions about the country's energy security. After a balance of payment crisis, Pakistan’s use of petroleum products significantly declined but only in the domestic and power sectors, whereas the government remained unfazed by the scarcity.
Transferring the burden to consumers is a business tactic that doesn’t suit a responsible government. During its early stages, Pakistan's energy sector took unbalanced measures and has since struggled to achieve equilibrium (we are preparing a detailed article on Pakistan’s energy sector, stay tuned!).
Can Pakistan tackle its circular debt, or will suppressing demand create new challenges?
We are planning to add a new section on Macro Pakistani’s website, ‘Macro Data Stories’, through which we intend to showcase Macro Pakistani’s most popular Instagram posts and articles on the website as long form infographics👇(scroll down to find out).
What else? You can even download the entire data story in the form of a PDF file or an image from the website.
GRAPHICS
Pakistan 🇵🇰 can unlock 🔓its labor productivity potential by embracing technology & empowering skills!
Data Visualization & Marketing Partner: Brand Nib
Visit: https://macropakistani.com/advertise/
Improve brand awareness for your startup/business or amplify the reach of your ongoing marketing campaigns by promoting them on Macro Pakistani. We are doing/have done successful paid collaborations with:
Send an email to hello@macropakistani.com
About Us: Macro Pakistani is a data-driven research platform that aims to provide a basic understanding of Pakistan’s economy. If you have an interest in contemporary news but are currently overburdened with sensationalism and specialized vocabulary, we are the platform for you.
How are we doing? Please send us any questions, comments or suggestions by replying to this email.