Independent Power Producers (IPPs) Refuse to Lower Electricity Rates Amid Government Pressure,
Islamabad-(Mudassar Iqbal)-According to sources within the Pakistan Electric Power Company (Pepco), IPPs have rejected the government’s request to reduce electricity rates, including capacity charges. The IPP owners have warned that altering their agreements will have severe consequences.
The IPPs had previously requested the government to lower rates for their 52% powerhouses, but now demand the removal of 38% illegal taxes levied on electricity bills. They argue that globally, taxes are collected by the Federal Board of Revenue (FBR), but in Pakistan, the FBR’s incompetence shifts the burden to taxpayers through electricity bills.
If forced to comply, the IPPs threaten to approach international arbitration courts. Sources suggest the government should first remove taxes and lower rates at its own power plants before negotiating with IPPs.
The current domestic and commercial electricity rates, ranging from Rs60 to 80 per unit, are the highest globally, leading to the closure of thousands of industries, including textile, steel, and plastic. The LESCO system has seen a 24% decrease in load compared to last year.
