The government has announced a major change in Pakistan’s electricity market, ending its role in forcing consumers to purchase power at government-set rates.
Federal Minister for Power Awais Leghari announced the change in Islamabad, saying the government would exit the electricity buying process from Sunday.
Under the new system, electricity producers and consumers will be able to trade power directly. Therefore, the government will no longer have the authority to buy electricity from producers or require them to sell it to the government.
New electricity trading system to begin with large consumers
The new electricity trading system will initially focus on large consumers, particularly industrial users. Consumers requiring more than 1 megawatt of electricity will qualify during the first phase.
Businesses and industries will be able to purchase electricity directly from power plants through a competitive process. Meanwhile, the government plans to auction 800 megawatts of electricity over the next five years.
The first phase will offer 400 megawatts for auction under the planned trading mechanism. According to Leghari, the system will operate with transparency and replace the existing electricity market.
Consumers may eventually choose power suppliers
The planned system could also give ordinary consumers greater choice in purchasing electricity. Under the new arrangement, consumers would eventually be able to decide where they buy their electricity.
The government would no longer purchase electricity and “force” it on consumers at government-determined rates. Instead, the new market structure is intended to allow greater interaction between electricity producers and consumers.
The minister said the government would no longer “force” consumers to buy electricity at rates determined by the government. He also said the government would not retain the right to buy electricity from power producers or require them to sell it.
New market aims to increase competition
Leghari also addressed concerns surrounding Independent Power Producers, saying they had become controversial. He said the new electricity market would introduce greater competition.
The shift marks a move away from the previous electricity buying model towards direct power trading. Moreover, the government expects the planned system to create a more competitive electricity market.
The new arrangement will initially focus on large electricity consumers. However, the government plans to eventually expand consumer choice across the wider electricity market.
For the latest updates, visit and follow The Truth International website (www.thetruthinternational.com) and subscribe to the YouTube Channel.
