Islamabad: Former Managing Director of PEPCO and energy expert Tahir Basharat Cheema has stated that the primary cause of inflation in the country is extremely expensive electricity, which he says has severely strained the national economy.
Speaking to Geo News, the former energy official said that high electricity costs have pushed the economy to a critical point, making it increasingly difficult for both industries and households to cope with rising expenses.
He argued that the burden of costly electricity has become a major driver of inflation across Pakistan, affecting production costs, household budgets, and overall economic stability.
Tahir Basharat Cheema said that one of the key reasons behind high electricity prices is what he described as “poor and unfavorable agreements” with Independent Power Producers (IPPs). He maintained that these agreements have led to excessive capacity payments and long-term financial liabilities for the power sector.
He further suggested that reforms are necessary in the energy sector, including the removal of fixed charges and certain taxes that contribute to higher electricity bills for consumers.
According to him, restructuring the power sector and revisiting existing contracts with IPPs are essential steps to bring down electricity prices and provide relief to the public.
The energy expert emphasized that without addressing the structural issues in the power sector, inflationary pressures in the country will continue to persist.
His remarks come at a time when electricity tariffs remain a major concern for households and industries, with rising energy costs being widely cited as a key factor behind inflation in Pakistan.
Economists and policy experts have long pointed out that Pakistan’s energy sector challenges, including circular debt and capacity payments, have placed a significant financial burden on the economy.
Tahir Basharat Cheema’s comments add to the ongoing debate over energy reforms, with calls for renegotiating power purchase agreements and improving efficiency in the distribution system.
He stressed that unless meaningful reforms are implemented in the electricity sector, sustainable economic stability will remain difficult to achieve.
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