The federal government has introduced a comprehensive short-term and mid-term reform plan aimed at improving the power sector including significant measures such as the elimination of cross-subsidy, revising taxes, and increasing electricity demand during the winter months.
The government has decided to abolish cross-subsidies to reduce the financial burden on the industrial sector.
Subsidy for domestic consumers
Subsidies for domestic consumers will now be linked to the Benazir Income Support Program (BISP) data, ensuring that only eligible households receive financial support.
Tax revisions
Taxes in the power sector will be revised as part of the reform plan.
Integration of Captive Power Plants: Captive power plants will be incorporated into the National Grid, and imported coal-fired plants will transition to using indigenous coal.
Increase in electricity demand
The plan includes a target to double electricity demand from 10,000 MW to 20,000 MW during the winter, with a focus on shifting appliances such as gas heaters and geysers to electricity and replacing substandard fans.
Transmission improvements
A three to five-year plan has been laid out to address transmission defects across the grid.
Solarization of diesel tubewells
Diesel-powered tubewells across the country will be converted to solar power.
Private Sector Involvement: The representation of the private sector in the boards of distribution companies (DISCOs) will be increased, and a decision has been made to merge the Central Power Purchasing Agency (CPPA) and National Transmission and Despatch Company (NTDC) to create an independent market operator.
The reforms are designed to be implemented within a timeframe of six months to one year, with some measures being short-term and others medium-term.
The government is committed to these bold steps to realign the energy sector, ensuring a more efficient and sustainable power infrastructure for the future. Zaheer Ali Khan reports from Islamabad.
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