The increasing electricity prices across the country have not only causeddistress among urban residents but have also resulted in higher productioncosts for industrialists. According to experts, recent unchecked increasesin electricity bills, along with other factors, can be attributed toprivate companies and Independent Power Producers (IPPs) generatingelectricity in the country.
According to government data, after the repayment of foreign loans for thegovernment, the largest outstanding amount is owed to IPPs. This situationis a significant burden on the national treasury despite the government’sefforts to repay the circular debt.
Experts suggest that the core issue lies in determining the cost ofservice. Under agreements with IPPs, a fixed return of 17% on equity isprovided, and this has to be paid by consumers whether or not thesecompanies generate electricity.
Experts emphasize the need for a thorough review of contracts with privatecompanies involved in electricity generation. Analysts suggest thatreducing capacity charges with Independent Power Producers (IPPs) canprovide relief to the public. Rising electricity prices are affecting bothcitizens and industrialists alike.
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Additionally, the charges imposed by IPPs, including fuel costs, sales tax,and income tax, contribute to the rising electricity bills. Industrialistsare facing increased production costs due to expensive electricity, leadingto higher prices for goods.
This, in turn, makes it difficult for them to compete internationally. Inconclusion, people are hoping for relief from the rising electricityprices, and experts suggest that renegotiating contracts with IPPs andreducing charges could help alleviate this issue.
