Dr. Khalid Waheed, a Research Fellow at the Sustainable Development Policy Institute (SDPI), warned that India’s suspension of the Indus Water Treaty could significantly increase electricity costs in Pakistan.
Speaking at a seminar, he stated that reduced hydropower generation from blocked river water will necessitate reliance on costly fossil fuels, leading to higher production costs. Dr. Waheed noted that even a 1% decrease in river flow could raise power production costs by Rs 5.8 billion.
Dr. Waheed emphasized that hydropower remains the most affordable source of energy in Pakistan, but growing geopolitical tensions are now threatening that advantage.
He also discussed Pakistan’s agreement with the IMF to phase out slab-based electricity billing in favor of cost-reflective tariffs, which could increase costs for lower-consumption households. As a solution, SDPI proposed providing solar panels to low-income households to reduce reliance on the grid and ease government subsidy burdens.
Dr. Waheed also expressed concerns about the EU’s upcoming Carbon Border Adjustment Mechanism, which could tax Pakistan’s textile exports due to high carbon emissions from coal-fired power plants, urging the industry to adopt cleaner production technologies.
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