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The federal government has unveiled a major reform plan to exit the power purchase business and completely eliminate circular debt within six years, marking a significant shift in Pakistan’s energy policy. The announcement was made by Energy Minister Awais Leghari during a joint economic briefing on Monday.
Leghari revealed that the government’s new approach focuses on privatization, automation, and performance-based governance, ensuring sustainability without burdening consumers. He noted that power tariffs have already been reduced by Rs. 10.5 per unit, including a Rs. 16 per unit cut for industries, to boost competitiveness and lower inflationary pressure.
In a notable step toward green mobility, electric vehicle (EV) charging tariffs were also slashed from Rs. 71 to Rs. 39 per unit, encouraging clean energy adoption.
| Key Reform Targets | Details |
| Circular Debt | To be eliminated in 6 years |
| Debt Reduction in Past Year | Rs. 700 billion cut |
| Power Price Cut | Rs. 10.5/unit (overall), Rs. 16/unit (industries) |
| EV Tariff Cut | From Rs. 71 to Rs. 39 per unit |
| Auction of Loss-Making Plants | Rs. 48 billion revenue; Rs. 7 billion saved annually |
| Automation Plan | Complete in 3 years (meters, transformers, prepaid systems) |
The minister highlighted that improved governance and reduced losses in power distribution companies (DISCOs) have already produced measurable results lowering company losses by Rs. 193 billion and preventing an additional Rs. 3.6 trillion burden through renegotiated IPP contracts.
“We are restructuring the entire power sector to operate transparently and sustainably,” said Leghari. “Consumers will not pay for inefficiency anymore.”
Experts view this reform as a crucial step toward stabilizing Pakistan’s energy sector, which has long struggled with inefficiencies and growing debt. The plan also aims to attract private investment through open market competition in power trading, signaling a gradual shift from state control to market-driven energy management.
