The ongoing debate over the government’s decision to cut gas supplies to captive power plants has raised some legitimate concerns, but it is essential to view the larger picture.
Transitioning gas away from captive power plants, and connecting industries to the national electricity grid is a well-planned, overdue reform that really promises to benefit Pakistan’s energy sector — and, by extension, every citizen — through improved efficiency and reduced power costs.
For years, Pakistan has faced rising energy costs and an unsustainable dependence on fixed-capacity charges that burden our national electricity tariff. As such, enabling industries to transition to grid power not only optimises our gas usage, but is also expected to decrease electricity costs for the general consumer.
Estimates suggest a potential reduction in tariffs of over Rs2 per unit, a change that will directly benefit households and businesses struggling with today’s high electricity prices.
The argument from some industries that this shift could impact their competitiveness overlooks the economic reality that captive power gas usage has already been under scrutiny in the previous International Monetary Fund (IMF) and World Bank programmes.
This change is anything, but sudden; it is a strategic shift that has been discussed for years now, backed by sound data on the energy sector’s inefficiencies and intended to enhance stability and sustainability.
Concerns about the reliability of grid power are understandable, but the solution lies in strengthening our grid, not in maintaining inefficient captive gas usage. This transition will incentivise the much-needed investment in grid infrastructure, helping ensure reliable, efficient electricity for all.
Pakistan’s economic stability relies on the timely implementation of these reforms as part of the current IMF programme. The longer we delay, the harder it becomes to secure affordable and reliable energy for the nation.
Moving forward with this phase-out of captive gas usage is not only a fulfilment of international commitments, but also an opportunity to finally address all the systemic issues that have been ailing the country’s energy sector for long.
TARIQ KHALIQUE
KARACHI
