Following the government’s decision to end contracts with five independent power producers (IPPs), there is a lot of conjecture about possible lower consumer electricity rates. Analysts are doubting if the government will gain significantly financially from this action and whether regular customers will benefit from the cancellation as well.
According to the BBC, Pakistan would have to pay electricity providers more than 2 trillion rupees in capacity fees during the current fiscal year.
According to Aafia Malik, an expert in the energy industry at the Pakistan Institute of Development Economics, “the termination of the five companies’ contracts will not provide substantial relief in capacity payments.” These five companies’ contracts were scheduled to expire within the next 18 months.
