In a recent session of the Senate Standing Committee on Energy, chaired by Senator Mohsin Aziz, the Secretary of the Power Division revealed startling details about the energy sector’s inefficiencies and the financial burden on the national exchequer. According to the Secretary, electricity companies provide free power worth Rs. 15 billion annually to their 190,000 employees. This disclosure underscores a significant issue within the sector, reflecting both the massive subsidies enjoyed by power sector employees and the increasing financial strain on the country. The Secretary of the Power Division highlighted that the electricity demand of our industry stands at 25 percent, with consumption continuing to decline. Despite plants being idle for the entire year, payments are still made, a situation driven by the high cost of electricity.
Federal Minister for Energy, Ovais Leghari, added that real-time data is lacking, and a comprehensive audit of Independent Power Producers (IPPs) is underway, as directed by the Prime Minister. Leghari noted that IPPs are paid for a full year, even though some plants, like the 1,845-megawatt ones, operate only 85 hours annually, costing Rs49 billion each year. He also pointed out the drastic increase in electricity costs, such as the Sahiwal Power Plant’s unit price rising from Rs3 in 2016 to Rs285 today. The revelations by the energy minister and Secretary can be seen as a damning indictment of successive governments’ failures in managing the power sector. The ongoing practice of capacity payments and the provision of free electricity to employees has drained the national treasury, while the public continues to suffer from high electricity costs and frequent load-shedding.
There is a growing demand for the government to revise agreements with IPPs and address this financial mismanagement urgently. The frustration among citizens has reached a tipping point, and there is a looming risk of public protests against the government, for which no effective countermeasures seem to be in place. The energy crisis is severely impacting Pakistan’s economy, creating difficulties for businesses and distress for the general population. Successive governments have made numerous promises to address these issues, but tangible progress has been minimal, exacerbating the problems further. IPPs have become a major economic burden, and no government appears willing to reassess the agreements with these entities.
It is increasingly clear that without strict regulation of IPPs, controlling rising electricity prices will remain impossible, thereby widening the gap between the government and the people. Prime Minister Shahbaz Sharif has pledged to tackle the issues in the energy sector, including capacity payments to IPPs, and to provide relief to the public. Speaking at the beginning of a recent Federal Cabinet meeting, he emphasized ongoing efforts to resolve the electricity crisis and recalled the measures taken during the previous administration, including ending long load-shedding hours and initiating power projects under the China-Pakistan Economic Corridor (CPEC). The Prime Minister’s statements reflect a commitment to addressing the energy crisis, yet the persistent increase in electricity prices remains a serious challenge. The ongoing political discourse and the focus on providing affordable electricity are vital, but addressing these issues effectively remains the core challenge for the government.
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