All Hell Breaks Loose In Pakistan After Customers Forced To Pay Massive Electrical Bills Despite Power Outages

Protests continued through Tuesday after Pakistanis received inflated energy bills, even though power supply from several plants in the area had stalled, ANI News reported.

Demonstrators gathered across the Punjab region to object to an unexpected spike in fuel cost adjustment (FCA) electricity consumption taxes, according to ANI News, burning their bills and resolving not to pay them, Pakistan-based newspaper Dawn reported. Pakistani Prime Minister Shehbaz Sharif announced Tuesday the government would waive FCA charges for 17 million consumers Tuesday after consulting with the International Monetary Fund (IMF), Dawn reported.

“My actual electricity bill, the cost of the units consumed, is PKR 2,000, but the overall bill goes up to over PKR 6,500, including FCA and other taxes. I am a day laborer and don’t have enough money to pay the huge bill,” Izhar Ali, one of the protesters, told ANI News.

Farmers blocked roads and chanted opposition slogans to the federal government and Faisalabad Electric Supply Company (Fesco) over increased energy prices last week, Dawn reported. Federal energy authorities allowed power plants to charge an additional PKR 115 billion on top of regular charges to compensate for the increased production costs in June, as well as increasing base tariffs across the country.

Punjab Minister for Energy Dr. Akhtar Malik joined the protests, arguing that the government’s heavy taxes were “killing the poor people,” Dawn reported.

Sharif earlier in July affirmed the government’s efforts to revive the downed power plants and stave off an imminent energy crisis, according to ANI News.

In a video address from Qatar, a major energy supplier to Pakistan, Sharif said the FCA tax had caused a “considerable increase” in electricity prices, calling the cost burden “intolerable” for ordinary consumers during a global energy crunch, Dawn reported.

“I hope from these measures there will be contentment among the people and they would realize that the government is trying to improve their situation,” he added.

The government hoped additional revenue from the taxes would improve its standing with the IMF, from which it hopes to obtain a loan, according to Dawn. High global prices have eroded Pakistan’s foreign exchange reserves, leaving the country teetering on the edge of default, according to the IMF.

Pakistan is set to receive a $1.17 billion loan from the IMF as early as September, renewing Pakistan’s funding program with the IMF after the global money-lending body suspended it, Pakistan’s Geo News reported, citing Bloomberg TV.

Qatar had also agreed to provide $2 billion in support to stave off a Pakistani default, Dawn reported.

Pakistan’s economic woes fit a global trend as protests against inflation and high energy costs occurring around the world compound worsening national debt. A deficit of foreign exchange reserves contributed to Sri Lanka’s economic collapse in July that also led to the government’s ouster.