The Sustainable Development Policy Institute (SDPI) recently hosted a dialogue focused on “Post-Budget Dialogue on Electricity Pricing: Impact of Fiscal Priorities and Tariff Reforms”.
This session gathered key energy experts and thought leaders to critically analyze the challenges facing Pakistan’s power sector, particularly the complexities of the electricity tariff structure, and emphasized the need for urgent simplification and stakeholder engagement.
Moderated by Senior Research Associate at SDPI, Ubaid ur Rehman Zia, the panel included prominent figures such as President of the Institute of Electrical and Electronics Engineers Pakistan (IEEEP) Tahir Basharat Cheema, energy analyst Rehan Javed, Dr. Khalid Waleed, Programme Manager at SDPI Senior Energy Associate at SDPI, Ahad Nazir, Principal of the U.S.-Pakistan Centre for Advanced Studies in Energy (USPCAS-E), Dr. Adeel Waqas, and former CEO of the Pakistan Textile Council Sheikh Muhammad Iqbal.
Rehan Javed highlighted the need for the government to alter its approach to promote privatization in the power sector, citing K-Electric’s improvements post-privatization as a model for other distribution companies.
He urged for tariffs that align more closely with industrial needs, allowing for better operational planning, and called for effective regulation to combat power theft.
Tahir Basharat Cheema criticized the outdated tariff structure, which has remained largely unchanged since the 1960s. He argued for a complete overhaul to meet current energy demands and advocated for increased investment in distribution companies suffering from inadequate funding.
Cheema also emphasized the need to reduce taxes on electricity bills and warned against using the power system for revenue collection.
Ahad Nazir pointed out the inefficiencies in energy use for non-productive purposes and discussed the issues of circular debt and underutilized power plants in Pakistan.
Dr. Khalid Waleed stressed the importance of incentivizing productive electricity demand and called for rationalizing the subsidy system, particularly the cross-subsidization affecting 54% of the population. He advocated for creating a competitive energy market and reforming power purchase agreements.
Dr. Adeel Waqas discussed the transformative potential of technology in the energy sector, urging the government to trust local engineering professionals and academic institutions in shaping the future.
Sheikh Muhammad Iqbal highlighted the potential impact of revising the net metering policy and criticized cross-subsidization among electricity consumers.
The panel collectively addressed the challenges of rising generation costs, tariff reforms, and the need for enhanced governance in the energy sector.
They concluded with a call for urgent and comprehensive reforms to secure a sustainable and equitable energy future for Pakistan, emphasizing a balanced approach that combines market-driven policies with government oversight.
