Islamabad: Federal Minister for Energy Owais Leghari has expressed concerns that electricity prices may continue to rise over the next 10 years. Speaking at a think tank event in Islamabad, Minister Owais Leghari warned that if the current situation persists, electricity rates could become even more unaffordable in the coming decade.
Owais Leghari stated that despite an annual demand increase of 2.8% over the next 10 years, the trend of rising electricity tariffs will continue. He labeled the future imported electricity project CASA as costly, adding, “Pray that CASA’s infrastructure doesn’t materialize in Afghanistan; otherwise, who will bear the high cost of CASA’s expensive electricity?” He noted that nothing could be done in IPP contracts, but the IPP owners have been kind enough to sacrifice some of their profits.
The minister emphasized the need to adjust regulations and pricing mechanisms to slow down the growth of solar net metering, adding that if subsidies are to be given to DISCOs (distribution companies) like K-Electric, privatization of these companies would be meaningless. He stated that the privatization of DISCOs is being scrutinized.
He noted that despite the privatization of K-Electric, a subsidy of 170 billion rupees is still required. If DISCOs are privatized similarly, additional subsidies of up to 500 billion rupees may be necessary for these companies. All these factors will be considered in the privatization process.
Regarding captive power plants, Owais Leghari said that the gas supply to these plants would be reduced gradually, fulfilling IMF requirements responsibly. Additionally, regulations and pricing mechanisms for solar net metering will need modification.
He added that people are increasingly opting for net metering and off-grid solutions, and without rationalizing regulations and pricing, the public cannot be discouraged from switching to solar. Requests for expressions of interest in privatizing three power distribution companies will be invited in May and June.
