IPPs refuse to cut rates, demand withdrawal of taxes on power bills

IPPs refuse to cut rates, demand withdrawal of taxes on power bills

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A representational image of a transmission tower, also known as an electricity pylon. — AFP/File

LAHORE: As soaring electricity bills continue to affect the inflation-weary masses, independent power producers (IPPs) have refused to slash electricity rates including the capacity charges, sources told Geo News on Sunday.

The IPPs, as per Pakistan Electric Power Company (Pepco) sources, want the government to reduce the rates of their powerhouses, which amount to 52% of the total plants, and withdraw 38% “undue” tax on electricity bills.

The incumbent government has been in talks with the IPPs for renegotiation of the contracts against the backdrop of severe criticism it has received over “unsustainable” electricity tariffs — the highest in the region.

Ever since coming to power in February, Prime Minister Shehbaz Sharif-led coalition government has been under the spotlight over sky-high electricity tariffs which have further burdened the inflation-weary masses.

Rising power tariffs have stirred social unrest and shuttered industries in the $350 billion economy, which has contracted twice in recent years as inflation hit record highs.

“The existing price structure of power in this country is not sustainable,” Awais Leghari, the federal minister heading the Power Division, told Reuters in an interview last week.

The Centre has time again reiterated its resolve to address the power issues which also include electricity theft, line losses etc.

However, the IPP owners maintain that the government should first abolish taxes and reduce the rates of its power plants and then come to negotiate.

Furthermore, they have hinted at approaching the International Court of Arbitration in case of any coercion on the said matter.



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