Editorial
The unsustainable cost of energy in Pakistan is on the verge of wreaking havoc on the working class, the backbone of our economy. The burden of unaffordable energy bills, job losses, and diminished real incomes amid unprecedented inflation is a heavy cross for them to bear. This crisis, if not addressed, will not only affect the working class but also households and the industrial sector, ultimately jeopardizing the stability of the entire economy. The reliance on an active International Monetary Fund (IMF) program as the sole means of averting a default has led to debilitating upfront conditions, such as tax hikes and subsidy cuts, exacerbating the economic downturn. Despite receiving aid, the government’s persistent avoidance of necessary reforms only perpetuates the cycle of financial mismanagement.
For years, the need to address the terms of contracts with Independent Power Producers (IPPs) has been emphasized, yet no substantial progress has been made. Calls to terminate agreements with IPPs in favor of more cost-effective energy sources have gone unheeded, resulting in mounting losses, increased theft, and a ballooning circular debt. The burden of inefficiency and corruption has fallen heavily on honest consumers, while an unfair energy pricing mechanism has further weighed down households already reeling from historic inflation and unemployment. At the same time, the industrial sector struggles to compete in the global market due to exorbitant energy costs.
The failure to initiate reforms or adjust the energy pricing mechanism to align with market principles is not just a concern, but a pressing need. This deliberate sabotage of production, employment, and revenue has led to a dire situation where the exorbitant energy prices alone are sufficient to plunge the economy into ruin. It’s high time we realize the importance of these reforms to avert this disaster.
Last year’s public outcry over inflated energy bills, necessitated by IMF revenue targets, highlighted the detrimental impact on the average Pakistani. While government employees benefit from annual raises, the working class has endured job losses and diminished real incomes amid unprecedented inflation. As a result, they are now burdened with unaffordable energy bills due to the government’s inability to address the energy crisis. In light of this, the future appears bleaker than the present for many.
