Govt ends exclusive electricity buying role

Summary Federal Minister for Energy Awais Leghari has said the government is effectively stepping out of the electricity purchasing business from today, marking a major shift towards a market-based power trading system in Pakistan. Speaking to the media in Islamabad, Leghari said the government would no longer have the exclusive role of purchasing electricity from power producers. Under the new system, electricity producers and consumers will be able to buy and sell power directly, reducing the government's involvement as an intermediary in the electricity market. AI Generated Summary Federal Minister for Energy Awais Leghari has said the government is effectively stepping out of the electricity purchasing business from today, marking a major shift towards a market-based power trading system in Pakistan. Speaking to the media in Islamabad, Leghari said the government would no longer have the exclusive role of purchasing electricity from power producers. Under the new system, electricity producers and consumers will be able to buy and sell power directly, reducing the government's involvement as an intermediary in the electricity market. He said no party would have the right to force the government to purchase electricity, while the government would also no longer be in a position to purchase power under the existing arrangement. The new mechanism will initially be introduced for industrial consumers and other large electricity users. According to the minister, the system is aimed at making electricity trading more transparent and competitive. He said greater transparency could eventually help consumers access electricity at lower prices. Leghari said providing affordable electricity to consumers remained a key priority of the government. He announced that 800 megawatts of electricity would be auctioned over the next five years. In the first phase, 400 megawatts of electricity will be offered for auction. The minister said the new electricity buying and selling mechanism would operate on the principle of transparency. He added that Pakistan would gradually develop an electricity market in which power producers and consumers could conduct transactions directly. He said the system would initially benefit consumers requiring more than one megawatt of electricity. Industrial units and other major consumers would therefore be among the first to participate in the new market. Leghari further said that, in the coming years, ordinary consumers could also be given the option to purchase electricity according to their own preferences. Under the proposed system, the government would no longer be able to purchase electricity and then sell it to consumers at rates determined solely by the state. The minister expressed confidence that the transition towards a competitive electricity market would improve efficiency and transparency in the power sector. He also indicated that the new mechanism could contribute to reducing electricity costs and generating savings in foreign exchange for the country. The government's decision represents a move away from the traditional electricity purchasing model, under which the state has played a central role in procuring power from producers and supplying it to consumers.