The recent decision to stop gas supplies to captive power plants is an important step towards energy reforms. The shift away from captive power plant gas usage is not an abrupt measure, but part of a carefully planned structural benchmark within the International Monetary Fund (IMF) programme.
This step aligns with both the IMF’s and World Bank’s recommendations, developed after a thorough analysis of Pakistan’s energy sector. Moreover, the government can enhance energy efficiency and help reduce the national power tariff by about Rs2 per unit.
A fundamental challenge in Pakistan’s energy system is the burden of fixed capacity charges, which increases as grid demand declines.
Apart from this, as industrial users rejoin the national grid, it will mitigate these charges, helping ease electricity costs for the broader consumer base. No doubt, such measures will particularly benefit household consumers who, unfortunately, currently bear the brunt of high electricity tariffs.
Furthermore, concerns about grid reliability are valid, but should not deter essential reforms. Expanding and rein-forcing grid connections for industrial users will ultimately drive investment in grid infrastructure, resulting in more stable and reliable power supplies.
In today’s economic climate, timely execution of these reforms is rather crucial. Frankly speaking, any delay would not only hinder the sector’s improvement, but also jeopardise critical international support.
The government’s plan represents a balanced approach towards ensuring reliable power for all, while also maintaining a sustainable economic outlook for Pakistan. Undoubtedly, this will eventually work for the greater good of all power consumers than a selected few.
ABDUL HAYEE
KARACHI
