Minister hints at extending discounted electricity package for six months

ISLAMABAD: Federal Minister for Energy Awais Leghari on Saturday announced that, following cabinet approval, the National Transmission and Dispatch Company (NTDC) will be divided into three entities to streamline electricity buying and selling in the market.

Speaking at a press conference in Islamabad, he said, “The prime minister has fulfilled yet another promise to the public by lowering electricity costs. For the first time in Pakistan’s history, we have significantly reduced the price of surplus electricity, providing relief to the public and delivering on our commitments.”

He said, “We are allowing industries and consumers to use an additional Rs26 worth of electricity. We have enough surplus power to offer this rate from October 1 until March 31.”

The minister said that the goal of providing affordable electricity was to boost economic activity and lessen the public’s financial burden.

He expressed hope that cheaper electricity would encourage people to reduce their reliance on expensive and harmful gas alternatives.

Leghari hinted that the subsidy package might continue until March 31, but partners believe it should be tried as a pilot project first. He said that the government plans to offer the package for six months every year, contingent on the results of the two-month trial.

This initiative, he said, would also benefit industrialists and businesspeople, enabling them to play a stronger role in Pakistan’s economy through regular planning.

“This is a major achievement within our reform agenda,” Leghari said. “We’re working towards stabilizing electricity prices on a permanent basis.”

He highlighted the need for this announcement due to the longstanding mismanagement of the NTDC, which has faced years of delays in implementing improvements in the transmission system. Projects that should have cost 6 billion rupees ended up costing 14 billion, with the delays and cost increases directly impacting electricity prices. The core issue, he noted, was the lack of proper management within the NTDC.

To address this, the NTDC will be thoroughly restructured into three separate entities. With cabinet approval, this division will enable a fresh start for efficient management in line with the Prime Minister’s directive.

The first company will operate as an independent market operator to facilitate electricity buying and selling. In two years, the government will no longer be the sole seller of electricity.

He explained that this company will operate similarly to a stock exchange, with buying and selling governed by demand and market prices.

The second company, the “National Grid of Pakistan,” will manage the system more effectively. The third, “Energy Infrastructure Development and Management,” will oversee future projects to ensure timely completion with controlled costs, justice, and transparency.

The federal energy minister emphasized that the purpose of these reforms is to relieve power plants capable of generating affordable electricity from the limitations of the current transmission system.

Leghari described this as a fundamental and necessary reform, predicting that these companies will be fully operational within four months. He called the approval of this plan a revolutionary step in Pakistan’s energy sector.

He also mentioned that power plants are operated according to a specific dispatch merit order, but these reports have not been made available to the public. In the last three months, however, the NTDC’s reports have been published on their website.

“These measures will bring transparency and visible reforms to the entire sector,” he said, adding that the announcement of the 26 rupee subsidy package is expected to increase electricity demand and activate LNG plants.

When asked about the new companies, Leghari said each would employ 60 to 70 staff members, with individual MDs, CEOs, and boards. Each company will be fully responsible for its performance.