ISLAMABAD: Pakistan’s federal government has announced a major reform to open the country’s electricity market, allowing consumers to choose their power suppliers for the first time in history.
According to Power Division Secretary Dr. Fakhar Alam Irfan, consumers using one megawatt or more will be able to select their electricity provider starting January 2026. The move is part of efforts to increase competition and provide fairer prices for consumers.
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Speaking before the National Assembly’s Standing Committee on Power, Dr. Irfan said that Pakistan’s power sector had long been burdened by circular debt, which, though stabilized in recent years, remains a major concern.
He revealed that financial losses in the power sector stood at Rs600 billion in 2024, but had been reduced to Rs397 billion this year. The government is working on further cuts, he added.
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Dr. Irfan explained that while losses above NEPRA’s targets do not immediately affect consumers, they eventually contribute to circular debt, which is then covered by the federal budget. He also directed that feeders with up to 20% losses should not be shut down, as such closures hurt both consumers and government revenue.
Committee member Shahida Rehmani raised concerns over Karachi’s ongoing power crisis, noting that the city is served by only one power company, K-Electric, despite being Pakistan’s largest metropolis. She highlighted poor infrastructure and slow implementation of government measures.
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Officials also briefed the committee on the rapid growth of solar energy in Pakistan, warning that while it provides cheaper electricity, it poses new challenges for the national grid. They noted that grid-supplied power includes around Rs14 in capacity charges and Rs9 in taxes per unit, making it far more expensive than solar energy.
The government says the electricity market reform is a step toward efficiency, transparency, and sustainability in Pakistan’s power sector.