Govt considers ending free electricity for officials to alleviate power sector crisis

ISLAMABAD: In a bid to alleviate the financial strain on Pakistan’s power sector, the government is considering ending free electricity provisions for government officials, including bureaucrats, judges, and parliamentarians.

This potential move is part of a broader emergency plan being developed by the Ministry of Energy due to mounting public and political pressure.

The plan could also include the withdrawal of free petrol benefits in a later phase. With the country facing severe financial difficulties and substantial external debt, these measures are seen as essential to prevent a possible default.

Under the proposed plan, only essential services for industry and business would continue to receive electricity, and there is also a proposal to reduce Maximum Demand Indicator (MDI) charges for factories.

Additionally, a review of the National Electric Power Regulatory Authority (Nepra) and the Oil and Gas Regulatory Authority (Ogra) is being considered.

The International Monetary Fund (IMF) recently approved a $7 billion bailout for Pakistan, highlighting concerns about high rates of power theft and distribution losses that contribute to the sector’s accumulating debt.

Power Minister Awaiz Leghari has announced structural reforms aimed at reducing “circular debt”—the liabilities from subsidies and unpaid bills—by Rs100 billion annually.

The power sector’s ongoing issues with theft and losses have had a significant impact on both poor and middle-class households. The government has responded to IMF demands by raising power tariffs, which has led to reduced household consumption despite record summer temperatures.

In December 2023, the federal government stopped providing free electricity units to officers in Grade 17 and above within power sector companies. These officers received a pay raise as compensation for the loss of this benefit.

This decision, approved by the Cabinet Committee on Energy and the federal cabinet, went into effect on December 1, 2023.

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