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Rising energy tariffs, IPPs cause mass frustration

LAHORE: The debate surrounding Pakistan’s rising electricity tariffs and the role of Independent Power Producers (IPPs) has sparked widespread public frustration in recent months. Businessmen, policymakers and politicians point the finger, often blaming the current chaos in the electricity sector on capacity payments, which IPPs receive even when they are not generating electricity. However, energy stakeholders argue that the situation is much more complex. They believe that many factors – including complex economic mechanisms, political decisions, global economic forces and above all, the volatile nature of the Pakistani rupee against the US dollar – are leading to rising electricity bills.