Pakistani factories are now warning that they may need to shut down production due to sky-rocketing energy costs, leading to another blow to Pakistan’s declining economy. Increasing power costs make it impossible for Pakistani factories to continue production for 40,000 industries in Karachi. Moreover, business groups of Pakistani factories have appealed to the government for more affordable fuel charges for Karachi.
Energy Import Costs Have Doubled to $17 Billion in 10 Months
Furthermore, this is the latest national problem after PM Shehbaz Sharif’s administration, which came into power in April. Since then, Pakistan’s energy import costs have doubled to $17 billion in the 10 months. Moreover, power utility company, K-Electric has also warned that it may start widespread power cuts, which could comprise prolonged rationing to industrial zones of Pakistani factories for the first time in 11 years.
Pakistani Factories Are Expected to Face Major Electricity Blackouts
“These current conditions are severely hindering KE’s ability to procure fuel, causing a permanent curtailment of power generation” that suggests as much as 10 hours of scheduled blackouts for some parts of the city, said Sadia Dada, a spokesperson for K-Electric. The utility is advising customers to cut power consumption by 20% compared to last year’s levels to reduce energy costs.
The government is looking to sign a long-term liquefied natural gas contract, which would help decrease its exposure to the expensive spot market and alleviate depletion. Shahid Khaqan Abbasi, who is supervising the energy sector for Prime Minister Sharif, stated that cutting power saves Pakistan nearly $125 million every hour.