Real reasons of power tariff hike

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It is noticed that efforts are being made for political point-scoring on the issue of increase in electricity prices. It is true that the common man has been affected by the inflated electricity tariff but one of the main reasons for the prevailing situation is that people do not know the background of the increase.

Few people are aware of the fact that the price of electricity is usually determined based on two factors: the first is the price of fuel and the second is the supply and acquisition of foreign exchange for its purchase.

At present, Pakistan is dependent on the import of furnace oil, diesel, coal and other fuels in order to generate electricity. Hence, fluctuations in the exchange rate of the dollar cannot be ignored. It should also be noted that the Independent Power Producers (IPPs) have to be paid in dollars