ISLAMABAD: Minister for Power Sardar Awais Leghari announced on Thursday that the federal government will file a review petition with NEPRA to reassess K-Electric’s tariff structure, stressing that power companies must earn profits through operational efficiency rather than relying on subsidies or charitable assistance.
Speaking to the media after addressing a workshop on “Reforms in the Power Sector, Leghari announced that the federal government is preparing to file a review petition in NEPRA regarding K-Electric’s tariff. “We are working to ensure that neither the federal government nor power consumers are overburdened,” he said.
Leghari emphasized the need for performance-based profits in the power sector. “We are moving toward privatization. K-Electric and other investors should earn profits based on efficiency, not subsidies,” he noted. He called for the enforcement of regulatory frameworks in the distribution companies (DISCOs).
“We will approach NEPRA to ensure consumers get electricity at reasonable prices,” he said, adding that K-Electric’s tariff burden is indirectly shared by consumers of other DISCOs through taxes. “We expect NEPRA to take decisions that benefit both the nation and the consumers.”
Regarding net metering, Leghari shared that consultations with stakeholders have been completed, and a revised policy has been prepared. “If the new net metering policy is approved, it will be implemented within a month,” he said.
The minister also noted that climate change has reduced hydropower generation, forcing the country to rely on more expensive sources of electricity. “The Fuel Price Adjustment (FPA) varies monthly due to fluctuations in generation costs,” he said.
Leghari also highlighted reductions in electricity costs: “Electricity prices have decreased by 31percent for the industrial sector, and by 50pc for 18 million household consumers.” However, he acknowledged that climate change has led to a drop in hydropower generation, forcing reliance on more expensive sources. “The Fuel Price Adjustment (FPA) varies monthly, but overall, electricity prices in Pakistan have declined,” he said.
On the circular debt issue, Leghari revealed that the government plans to borrow from banks to eliminate the mounting circular debt soon.
Earlier, while addressing the workshop, Leghari said there is ample electricity available for grid supply over the next three years. He added that over the past year, the government has implemented key reforms in the power sector to provide relief to consumers.
The minister also strongly denied reports of any increase in electricity prices, stating that the government has not raised electricity tariffs in any form. In fact, he said, the government has reduced electricity rates by up to 50% for around 18 million consumers.
“In the last year alone, industrial tariffs have been reduced by 30%. The government is committed to bringing long-term, sustainable reductions in power tariffs,” he said.
Leghari stated that Pakistan is undergoing a revolution in renewable energy. “For the past year, we’ve been conducting research and analysis in the energy sector and are also reviewing agreements with Independent Power Producers (IPPs),” he noted. “As a result, electricity prices have started to decline.”
He further said, “Solar energy is a remarkable and promising source. In recent years, solar power production has increased significantly.”
The minister criticized past planning in the energy sector, saying the projections made in previous years were not realistic. He reaffirmed the government’s intention to reduce power tariffs sustainably and highlighted the exponential progress in alternative energy sources.
“During the COVID-19 pandemic, energy demand increased. We are now working on separating the government from future electricity procurement,” he added. He also emphasized that the inclusion of the Bhasha Dam into the power system would be a significant development.
Leghari assured that the government is making efforts to shield consumers from the consequences of poor planning in the power system. He said reforms are underway in the transmission sector, although the country currently lacks modern technology to assess load pressure on transformers and feeders.
He again stressed that Pakistan is witnessing a revolution in renewable energy, with a visible increase in solar power generation. Regarding thermal plants, he said the government is trying to ensure that coal- and gas-fired power plants do not adversely impact the environment.
In response to a question, the federal minister said that the cabinet has ordered a review of the net metering policy. Stakeholder consultations will be held, and feedback will be sought. After cabinet approval, the revised policy will be implemented.
He noted that electricity rates for the industrial sector have been reduced by 30 to 32%, and prices for approximately 18 million domestic consumers have dropped by 50%.
In response to another question, Leghari categorically rejected recent reports of an increase in electricity prices, clarifying that the adjustment being referred to is part of the regular monthly Fuel Price Adjustment (FPA), which is a routine mechanism. The government has not increased base electricity tariffs in any way.
the Prime Minister will soon announce a new industrial tariff policy aimed at enhancing competitiveness. He reiterated the government’s commitment to renewable energy, noting that 3,000 megawatts of furnace oil-based generation power plants have been shut down in recent months.
Leghari concluded that Pakistan has seen an overall reduction in electricity prices and that a plan to raise funds from banks to eliminate circular debt is expected to be finalized soon.
