Over the past week, Pakistan has been shaken by demonstrations against rising energy and gasoline prices. Thousands of people have taken to the streets of the nation’s cities and lit their electricity bills on fire.
In the past three months, the price of electricity has more than doubled, reaching almost 50 rupees (12p) per kilowatt. The cost of one liter of gasoline has more than doubled since June when it was priced at 262 rupees; it is currently selling for 305 rupees.
The PM of Pakistan, Imran Khan, got removed from office in April of the previous year following a vote of no confidence. Pakistan is currently in the throes of a political and economic crisis, with a record inflation rate of 36.4%. The country was also ravaged by floods the year before, which inundated much of the country and caused widespread destruction.
An employee of the utility business K-Electric (KE), which generates and distributes power to the city, was assaulted by an angry mob last week in Karachi, which sparked a new wave of violent demonstrations in the city.
According to Voice of America, the energy department in the province of Khyber Pakhtunkhwa asked for police security for its workers and installations after receiving threats of attacks from demonstrators.
“Hunger can bring worst in people,” said Atiq Mir, head of the All Karachi Tajir Ittehad, which is a traders’ association.
The climax of the demonstrations occurred over the weekend when, in response to a call issued by the Islamist group Jamaat-e-Islami, stores and markets across Pakistan shut down. It is believed that the country lost approximately 10 billion rupees (or 25 million pounds) as a result of the closures that occurred on Friday and Saturday.
According to Mohammad Niaz, 37, who worked in Saudi Arabia until the Covid pandemic caused him to return to Pakistan, the 30,000 rupees that he earned per month as a server was not enough to meet his bills. He added that he was obliged to return to Pakistan. In the past three months, both the price of food and my electricity bill have soared, and this is despite the fact that we only have access to electricity for nine hours every day.
After setting aside 6,000 rupees for his two children’s school fees, as well as the bus fares, books, and stationery they required, he reported that there was very little money left over for eating.
Since August 2022, the price of wheat flour has more than doubled, as reported by the Pakistan Bureau of Statistics; this indicates that the cost of bread has also increased by a factor of two. Sugar is also more expensive than other sweeteners.
Perween Riaz, who is 54 years old and has lived in Karachi for about 20 years, recently mentioned that she would relocate back to her village in the province of Punjab. “Karachi is not for the poor any more,” claimed the caretaker, who makes 25,000 rupees every month. In spite of the fact that her husband makes the same amount as she does as a driver, the couple has managed to raise six children and two grandchildren.
“Food prices have only increased in the last year,” she claimed, adding that her monthly grocery bill was double what she paid two years ago. “In the last year, food prices have only increased,” she said.
“Prices of electricity are set by the government for the entire country, yet utilities across the country are under fire for something they do not control,” said Imran Rana, director of communications for KE.
“Violence is not the answer,” he stated emphatically. Attacking members of the utility personnel who are carrying out their duties would only make the issue worse.
Muhammad Ali, who is in charge of energy policy, stated that the government was working on a solution to the problem but that many of the existing challenges were beyond its ability to handle.
“The soaring dollar rate and increase in global petroleum prices have meant that petroleum products are costing Pakistan much more,” he said. “The global price of petroleum has also increased.”
“In turn, they are required to be sold at the same high rate, which has resulted in an increase in electricity rates given that a portion of the power was being generated from costly imported fuel. Unfortunately, this was something that had to be passed on to the end users.
He went on to say that the hands of the caretaker government were tied as a result of an agreement that the previous government had made with International Monetary Fund (IMF) to raise prices as a condition of getting a $3 billion (£2.4 billion) loan in order to avoid defaulting on foreign debt in July.
Another stipulation was that all forms of fuel assistance be eliminated. According to the minister, “In the next few months, we are doing our best to take things towards betterment,” and they are trying their best. “Solutions have been known for a very long time but were never actually implemented.”
There have been calls for businesses to adjust their hours of operation so that they do not use power between the hours of 6:30 pm and 10:30 pm, which is when the rates are the highest. At the moment, the majority of merchants are open from noon till 10 o’clock at night. Traders in the past have resisted this move for various reasons.
Some people have been able to avoid the rising cost of energy. A businessman named Azher Karimjee built his house three years ago and installed 10 KW of solar panels on the roof as well as storage batteries. Since then, he has “not paid a rupee to KE” because he is able to produce enough electricity to sell it back to the power company.
“Despite the fact that the initial investment was quite costly, it turned out to be the wisest choice I could have made.” Having reserve batteries available has proven to be a significant benefit during the evening’s peak demand.”
Because “capacity payments” to independent power producers are fixed against interest and exchange rates, they have increased as a result of the depreciation of the rupee and the rise in interest rates. As a result, the government is contemplating whether or not to regulate this tariff structure in order to prevent a loss of income caused by these rising “capacity payments.”