Dr Gohar says production cost for electricity in July was Rs9.03, yet consumers are being billed at higher rates
ISLAMABAD: Former caretaker Minister of Commerce Dr. Gohar Ejaz has voiced serious concerns regarding the steep rise in electricity bills, highlighting a significant discrepancy between the production cost and the billed rates. In a tweet posted recently, Dr. Ejaz questioned how electricity costs per unit have surged to Rs80, despite a reported production cost of just Rs9 per unit for July.
Dr. Ejaz pointed out that in July, the total average electricity generation was 20,000 megawatts, with 35 percent, or 7,000 megawatts, coming from hydropower sources. He underscored the troubling gap between the actual production cost and the high rates charged to consumers. “The production cost for electricity in July was Rs 9.03 per unit. So how are the bills reaching Rs 40, Rs 60, or even Rs 80 per unit?” he questioned in his tweet.
Criticizing what he termed “mismanagement and the payment of capacity charges for electricity that is not actually produced,” Dr. Ejaz emphasized that Pakistan has the capacity to generate over 43,000 megawatts of electricity. He argued that consumers should only be billed for the actual electricity that is generated and consumed, rather than inflated rates that do not reflect production costs.
Dr. Ejaz also called for more equitable billing practices across different consumer categories, including residential, commercial, industrial, and agricultural users. He highlighted the financial strain that the current rates are placing on consumers and praised the Punjab government’s recent decision to temporarily reduce electricity costs to Rs14 per unit for those using up to 500 units over the next two months. He described this move as “praiseworthy” and indicative of necessary relief efforts.
In addition to his concerns about electricity rates, Dr. Ejaz has previously addressed another economic issue: the inconsistency between Pakistan’s stable currency rates and the high-interest rates maintained by the State Bank of Pakistan (SBP) at 19.5 percent over the past year. He criticized these high rates, which are intended to control inflation but have, in his view, imposed a substantial economic burden on the country.
According to Dr. Ejaz, Pakistan’s total net federal tax collection, including the Petroleum Development Levy (PDL) and other sources, amounts to Rs10.6 trillion. Of this, Rs9.8 trillion is allocated to servicing domestic debt. The high-interest rates have led to an additional Rs3 trillion in payments over inflation-adjusted costs, further exacerbating the economic challenges faced by the country.
Dr. Ejaz’s statements reflect a growing concern among various stakeholders about the economic management and the impact of current policies on ordinary citizens. His calls for transparency and reform in electricity billing and fiscal policies highlight the need for a reassessment of current economic strategies to better align costs with production realities and consumer welfare.
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