Analysts reveal methods to provide relief on electricity bills
Shares
The increasing electricity prices across the country have not only caused distress among urban residents but have also resulted in higher production costs for industrialists. According to experts, recent unchecked increases in electricity bills, along with other factors, can be attributed to private companies and Independent Power Producers (IPPs) generating electricity in the country.
According to government data, after the repayment of foreign loans for the government, the largest outstanding amount is owed to IPPs. This situation is a significant burden on the national treasury despite the government's efforts to repay the circular debt.
Experts suggest that the core issue lies in determining the cost of service. Under agreements with IPPs, a fixed return of 17% on equity is provided, and this has to be paid by consumers whether or not these companies generate electricity.
Experts emphasize the need for a thorough review of contracts with private companies involved in electricity generation. Analysts suggest that reducing capacity charges with Independent Power Producers (IPPs) can provide relief to the public. Rising electricity prices are affecting both citizens and industrialists alike.
Additionally, the charges imposed by IPPs, including fuel costs, sales tax, and income tax, contribute to the rising electricity bills. Industrialists are facing increased production costs due to expensive electricity, leading to higher prices for goods.
This, in turn, makes it difficult for them to compete internationally. In conclusion, people are hoping for relief from the rising electricity prices, and experts suggest that renegotiating contracts with IPPs and reducing charges could help alleviate this issue.
