ISLAMABAD: Pakistan’s Power Minister Sardar Awais Ahmad Leghari has announced a reduction in the monthly fuel adjustment charges for households consuming up to 300 units of electricity and those using agricultural tubewells, state-run media reported this week. 

Pakistan’s move to raise electricity prices as part of energy sector reforms agreed with the International Monetary Fund (IMF) over the past few years resulted in citizens suffering from steep and sudden increases in electricity bills.

The state-run Associated Press of Pakistan (APP) reported on Wednesday that the benefit of reduced fuel adjustment charges was initially halted for consumers using up to 300 electricity units in June 2015. For those using agricultural tubewells, this relief was withdrawn in December 2010.

“The Power Division has sent a letter to the National Electric Power Regulatory Authority (NEPRA), requesting the reinstatement of these adjustments,” APP said. 

“By waiving these charges for low-usage consumers and agricultural tubewells, the government aims to ease the financial burden on farmers and households with limited electricity consumption,” it quoted Leghari as saying. 

Pakistan produces expensive electricity due to a combination of factors including high reliance on imported fossil fuels, inefficient energy mix, substantial transmission and distribution losses and chronic issues like circular debt and regulatory inefficiencies.

The country’s outdated infrastructure and inadequate power plants further exacerbate costs, while underutilization of domestic resources such as hydropower and coal add to the problem.

Additionally, fluctuations in foreign exchange rates and complex tariff structures contribute to higher electricity prices. High power cost is one of the key factors that lead to inflation in the country.