LAHORE , May 27, 2023: A recent study conducted by the Institute of Policy Studies, Islamabad titled “Impact of Rising Electricity Prices on Consumer Behavior: The Case of Power Distribution Companies in Pakistan” has found that increasing electricity tariffs are becoming unaffordable for the general population and are negatively affecting their consumption habits.
The study surveyed over 1,000 households and 140 shop owners in the top 10 cities of Pakistan. The results revealed that a majority of respondents have experienced significant increases in their electricity bills in recent months. The study reveals a direct relationship between the magnitude of bill increases and the extent of consumption reduction, showing that higher price hikes lead to greater efforts in reducing electricity usage. However, despite reducing consumption significantly, majority of participants reported that their bills were un-wavered.
The study recommends implementing enhanced governing measures and regulatory actions in the energy sector, along with affordable electricity tariffs. The alternative payment options to accommodate different economic circumstances could be also be effective to reduce the miseries of public. Along with the aforementioned issues it stresses the importance of addressing issues like load shedding, also mitigating the consumer’s ignorance about peak/off-peak hours will help reducing their electricity costs.
Furthermore, the study highlights the adverse impact of rising prices on the financial health of Distribution Companies (DISCOs). It found a sharp decline in their recoveries, which can hinder their ability to pay-back for power purchases, maintain distribution networks functioning, and service debts. These challenges limit DISCOs’ capacity to invest in infrastructure upgrades, provide quality services, and improve the reliability of electricity supply.
The study was aimed to provide better insights into the crisis in order to alleviate the public from miseries and emphasised on the need of expeditiously reforming the sector. The worried consumers are getting tensed which can break down the supply chain circle of electricity in case of non-recoveries.