Electricity costs in Pakistan, one of the world's poorest countries, doubled and even tripled over the summer, making the costs almost unbearable for many families and prompting widespread angry protests around the country, as well as a nationwide strike.
Electricity normally eats up 15% to 20% of an average Pakistani family’s income, but has risen by 100% to 200% in recent months. Coupled with general inflation and rising gas prices, many Pakistani families are finding themselves having to choose between paying their utility bills and paying for necessities such as food, medicines, and children’s school expenses.
Rubina Bibi, a resident of Rawalpindi, a large city in the Punjab region in northern Pakistan, told The Media Line that she could not sleep out of worry over the rising cost of electricity.
“We live in a rented house. We have two rooms and a tiny yard. However, our power cost is 8,000 rupees [about $28], while my husband's monthly income is 30,000 rupees [about $105],” Bibi said.
“We have just one pedestal fan and two lights. Apart from the refrigerator, there are no electrical gadgets in the house. … Why is the cost so high? I’m not sure how the family will survive with such an income. Anxiety has disrupted our sleep.”
Shazia Sultana, a resident of Wahdat Colony in Lahore, Pakistan's second-biggest city, works as a house cleaner and has a physically disabled husband and two children. The elder child, age 14, is studying in a technical workshop, while the younger child goes to school.
“There are still a few days left in the month, but the problem is starting again as to how to pay the next month’s bill,” Sultana told The Media Line.
“Earnings are inadequate to cover family expenses. We borrowed money from someone to pay our electricity bill last month,” she said.
“There is no longer sufficient cash to treat my ailing husband. We would have committed suicide by now if it had not been forbidden in Islam.”
Ali Kiyani, a resident of Gujar Khan, a city near Rawalpindi, told The Media Line that his electricity bill includes taxes that are almost equal to the cost of the electricity itself.
"The cost of electricity used is 22,000 [rupees, about $77]," he said. "By increasing the tax bill by 20,000 [rupees, about $70], the electricity bill is increased to 42,000 [rupees, about $147]. Everyone, regardless of their financial status, appears surprised and disturbed about the hidden charges in the electricity bills.”
Pakistan’s previous coalition government raised electricity prices some 100 times during its tenure.
Electricity prices continue to rise in Pakistan
The current interim government lobbed yet another inflation bomb on Thursday, when the National Electric Power Regulatory Authority approved another rise in electricity prices of 5.04 rupees per unit, raising the price to 29.78 rupees per unit. For a home consuming 400 units per month, the electricity bill will rise from 12,000 to 13,000 rupees ($42 to $45) to 16,000 to 17,000 rupees ($56 to $59) per month.
The electricity and fuel price increases are the outcome of an agreement between Pakistan and the International Monetary Fund, when the international lender granted Pakistan a short-term loan to avoid a default.
Protests in towns and cities against constant power interruptions are not new, but the rising costs appear to have brought many people to a breaking point, with demonstrators symbolically burning their electricity bills during the protests and demanding that the government reduce the cost of electricity. People also cursed the country's rulers and officials on social media upon learning about the increase in electricity prices.
Protesters took to the streets in several towns and cities across the country over the weekend, with residents and traders taking part in demonstrations on Saturday in key cities, including Rawalpindi, Multan, Gujranwala, Sargodha, Faisalabad, and Peshawar.
Some incidents of violence against the staff of electricity supply companies have also come to light in various cities.
In Karachi, the capital and the country's main industrial and business hub, a large protest of residents and traders began on Monday.
“Why should the middle and working classes bear the burden of the ruling class's affluence and privileges?” Hafiz Naeem ur Rehman, chief of Jammat e Islami, a moderate Islamic party in Karachi, told The Media Line.
“Free electricity units, free petrol, and other benefits of the elite class should be stopped instantly. Do the middle classes starve their children for the luxuries of this rolling class? These are not electricity bills, but death warrants," he said.
“Pakistan is one of the 12 countries in the world with the greatest coal reserves. Pakistan can generate thousands of megawatts of inexpensive electricity using coal.”
Electricity distribution companies have begun asking law enforcement agencies to provide them with security amid the protests.
Caretaker Prime Minister Anwar-ul-Haq Kakar called an emergency meeting of government officials and electricity distribution companies on the issue of fuel bills on Sunday.
In a statement on social media platform X, Kakar said there would be discussions on giving relief to consumers on electricity bills.
“The situation will get more intense in the coming months as the government has no clear plan for recovering the [power] transmission and distribution losses, nor we can see any kind of upcoming investment in these areas,” Amina Qureshi, assistant chief of policy at the Pakistan Institute of Development Economics in Islamabad, told The Media Line.
“The continuous rupee depreciation against the dollar owing to the uncertainty regarding the general elections is adding more pressure to the ballooning circular debt,” she said.
“The cost of living has increased manifold in the past few months and is likely to increase further in the same pattern. On the government’s front, we see limited fiscal space to expand its social security programs and as a result, the situation for the ordinary person will get worse. Inequality and poverty will become more aggravated in the coming months, and we will be moving down the ladder of development.”
Qureshi called for short- and long-term power sector reforms.
“There is a need to crack down against electricity theft, withdraw free units granted to government officials, install prepaid electricity meters where theft is widespread, and encourage net metering,” she said.
“In the long run, privatization, producing electricity via our indigenous resources, revisiting the contract with supply companies, and moving towards renewable energy resources will reduce the burden on the power sector.”
Tariq Mehmood, an Islamabad-based leading economist and trade expert, told The Media Line the situation had worsened noticeably in recent months.
“Pakistan is confronted with a worrying situation in its power sector, which escalated notably during August and is anticipated to persist in September and the coming months," he said.
"The situation is characterized by rapid population growth, intensifying the demand for electricity, limited industrial progress, soaring electricity rates, burdening households, incidents of nonpayment and illegal activities, and even suicides driven by economic hardships. These observations underscore the urgent need for comprehensive solutions to address the challenges faced by the power sector and alleviate socioeconomic pressures on the population.”
Mehmood said the root of the issue is the inefficiency of the state-owned electricity distribution companies, which rely on taxpayer subsidies.
“Various government taxes, surcharges, and circular debt markup further inflate consumers' bills, impacting disposable income and limiting spending on essential needs, such as nutrition, health, and education,” he said.
“The current system penalizes lower-income households while allowing those with resources to transition to alternative energy sources, such as solar energy. Addressing these challenges requires a comprehensive approach that focuses on improving the efficiency and capacity of the power sector, ensuring affordability for the general population, and implementing measures to alleviate poverty and its associated social implications.”
Saddam Hussein, assistant chief of policy at PIDE, told The Media Line the state had to begin taking responsibility for vulnerable sectors of society.
“The scenario is particularly provocative for a country like Pakistan, which is experiencing an economic downturn and has limited fiscal flexibility. In this context, the government is compelled by economic logic to price energy in accordance with the supply and demand framework. This also indicates that subsidies must be gradually reduced to zero," Hussein said.
“However, for a country where the poverty rate is high and is surging with the current economic conditions, the state has a responsibility to take care of the most vulnerable segments of society. The income levels are low and inflation is at the highest in Pakistan's history. Almost 60% to 70% of the income of the lowest, lower, and even middle classes is consumed by the food basket. The remainder is spent on energy.
“The calls for targeted subsidies for the vulnerable population are an immediate measure. In the long run, the government should incentivize solarization. Moreover, it should install smart pre-paid meters to avoid theft, so that cost recovery is achieved.”