Researchers at the Sustainable Development Policy Institute have revealed alarming insights during a press briefing in Karachi, indicating that inflation in the United States could lead to higher electricity costs for Pakistanis.
According to Dr. Khalid Wahid and Ahad Nazir, fellows at the institute, the impact of US inflation could result in a significant hike in electricity tariffs for thousands of Pakistani consumers.
Dr. Khalid Wahid emphasized that the US Consumer Price Index (CPI) and the depreciation of the US dollar could directly influence electricity tariffs in Pakistan, as payments for imported energy are typically made in US dollars.
He highlighted that from 2019 to 2024, there has been a 253% increase in the tariff components due to inflation in the US.
The briefing also underscored that local inflationary pressures in Pakistan would further exacerbate electricity tariffs, compounding the financial burden on consumers.
The Working Capital of the IPPs (Independent Power Producers) has seen a 716% increase over the past four years, with tariffs including 12% to 20% taxes and 70% capacity charges.
Dr. Wahid pointed out that despite the potential benefits of solarization, political motivations have favored power plants over transmission lines, leading to higher capital charges for citizens.
The researchers warned that these factors could collectively intensify the impact of inflation in the US on Pakistani electricity costs, urging policy makers to consider sustainable energy solutions to mitigate these effects.
