The Minister for Power, Sardar Awais Ahmed Khan Leghari, on Saturday presented a year-end review highlighting key achievements and ongoing initiatives aimed at transforming Pakistan’s power sector.
He said through innovative policies, substantial investments, and bold reforms, significant progress has been made towards ensuring energy sustainability, reducing electricity costs, and driving economic growth.
The Minister said the power sector has shown marked improvement in electricity prices. He said the average price of electricity has decreased to Rs44.04 per unit from Rs48.70 per unit in June 2024, marking a reduction of Rs4.66.
He said industrial electricity prices have also seen a significant drop to Rs47.17 per unit, down from Rs58.50 per unit in June 2024, reflecting a reduction of Rs11.33.
The Minister presented a detailed overview of reforms undertaken in the last nine months. ‘We have eliminated Rs150 billion in cross-subsidies from the industrial sector, a step that has boosted industrial growth and job creation in Pakistan,’ he stated.
He emphasized that the government is diligently working on upgrading the transmission sector, including the trifurcation of NTDC (National Transmission and Dispatch Company), into three entities.
The entities include: The National Grid Company of Pakistan for efficient and reliable transmission, The Energy Infrastructure Development and Management Company for project management, and the Independent System and Market Operator for a competitive and transparent electricity market.
Discussing distribution-side reforms, the Minister said the government is moving towards privatization and concession models, preceded by the hiring of independent Boards of Directors for distribution companies. Circular debt costs are being shifted from electricity bills to the national debt to reduce burden on the consumer, he added.
Speaking about the solarization of agricultural tube wells in Balochistan, the Minister said we are solarizing 27,000 tube wells at a cost of Rs55 billion, with a 70% federal government contribution. This initiative, he said, will promote green energy and revolutionize the agriculture sector in Balochistan.
On the subject of Independent Power Producers (IPPs), the Minister revealed that agreements with five IPPs have been terminated in the first phase, achieving national savings of Rs411 billion and annual savings of Rs70 billion.
In the second phase, agreements with eight bagasse-based IPPs have been settled, resulting in annual savings of Rs8.826 billion and national saving of Rs238.224 billion, he added.
He said negotiation with 16 other IPPs are going on, as a result of that we will have a national saving of Rs481 billions. He elaborated on the ‘Bijli Sahulat Package’, saying, ‘This package introduces a special tariff of Rs26.07 per unit for households and industries.
Sardar Awais Ahmed Khan Leghari said domestic consumers will benefit from savings ranging between Rs11.42 to Rs26.00 per unit, while commercial consumers can expect savings of Rs13.46 to Rs22.71 per unit.
He said industrial users will enjoy savings ranging from Rs5.72 to Rs 15.05 per unit, adding that this initiative underscores our commitment to reducing electricity costs and supporting economic growth.
Looking ahead, the Minister announced that we plan to introduce special tariffs for electric vehicles (EVs) under a forthcoming EV policy, adding that this policy will reduce dependency on imported fuels, lower greenhouse gas emissions, and improve air quality.
He said it will also foster economic growth through job creation in local manufacturing and the development of charging infrastructure. He said this new policy will revolutionize the transport sector of Pakistan.
The Minister acknowledged the challenges faced by the power sector, including transmission constraints and poor recovery rates, which contribute to Rs250 billion in losses caused by DISCO (Distribution Companies) inefficiencies.
He said efforts to manage Rs2.2 trillion circular debt burden are ongoing, with a focus on reducing consumer electricity costs. He said we are also addressing the impact of dollar-denominated debt exacerbated by Pakistan rupee depreciation.
The Minister concluded by reaffirming the Power Division’s commitment to delivering affordable, sustainable, and reliable electricity to the people of Pakistan.
He said these reforms and achievements reflect our dedication to addressing long-standing challenges in the power sector while building a resilient and prosperous future.
He said with increased economic activity, enhanced employment rates, and lower electricity costs on the horizon, the future of Pakistan looks promising.