High power tariffs exceeding consumers’ affordability, impacting consumption patterns: study

A technician from Karachi Electric, the company that supplies electricity to Pakistan’s largest city, checks electricity meters in a residential building in Karachi on May 13, 2010. — AFP

A recent study conducted by the Institute of Policy Studies in Islamabad has shown that rising electricity prices are adversely affecting consumers’ affordability and affecting their consumption patterns.

The study – titled “Impact of Electricity Price Increase on Consumer Behavior: The Case of Electricity Distribution Companies in Pakistan” – covered more than 1,000 households and 140 shop owners in Pakistan’s top 10 cities.

Survey results indicate that most respondents have experienced a moderate to significant increase in their electricity bills in recent months.

The study further highlights the relationship between the magnitude of bill increases and the extent of consumption reduction, indicating that price increases lead to more significant efforts to reduce electricity consumption.

However, despite the overall reduction in electricity consumption, a significant portion of survey participants reported significant reductions in their bills.

It recommends better governance and regulatory measures in the energy sector as well as the need for affordable electricity rates and alternative payment options to accommodate varying economic conditions.

The study also emphasizes the importance of addressing issues such as load shedding and increasing consumer awareness about peak electricity prices.

Moreover, it found that the alarming trend also led to a sharp decline in the receipts of the distribution companies (DISCOs) which led to difficulties in procuring power from generation companies, maintaining the distribution network and repaying debts. can

These factors further hamper the ability of DISCOs to invest in upgrading infrastructure, providing quality services and improving overall reliability of power supply.

The research emphasizes effective measures to address the concerns of electricity affordability and suggests strategies for distribution companies to mitigate the negative impact of rising prices.

Overall, this study provides valuable insights into the impact of rising electricity prices on consumer behavior in Pakistan and helps DISCOs and policy makers to address affordability concerns and address these consumer costs and electricity prices. Makes recommendations to ensure a sustainable balance between affordability.

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