ISLAMABAD: The Cabinet Committee on Energy on Wednesday approved the formation of an independent entity to reform Pakistan’s energy market by enabling consumers to purchase power from multiple suppliers, moving away from the current government-controlled system, where it is the sole buyer of electricity.
Pakistan’s energy sector has long struggled with financial strain due to circular debt, power theft and transmission losses, which have led to blackouts and high electricity costs.
The development of the independent market is viewed as a critical step toward addressing these issues by fostering competition, improving transparency and attracting foreign investment, ultimately easing the financial burden on the government and consumers alike.
The committee gave principal approval for the creation of the Independent System and Market Operator (ISMO) during a meeting chaired by Prime Minister Shehbaz Sharif, though the decision still requires endorsement by the federal cabinet for implementation.
“ISMO will gradually replace the government as the sole buyer of electricity and transition the energy market into a multi-player independent market,” the PM Office said in a statement issued after the meeting. “Consumers will be able to purchase electricity from suppliers other than just distribution companies under this system.”
“This initiative will help establish an efficient, transparent and competitive electricity market in Pakistan,” it added.
The creation of ISMO is also expected to reduce circular debt and stabilize electricity prices.
“The ISMO board will include experts from the energy sector to ensure smooth operations,” the statement informed.
Addressing the meeting, the prime minister emphasized the need to expedite efforts to reduce theft and losses in the electricity sector.
“We are taking priority-based measures to reform Pakistan’s energy sector,” Sharif added.
Pakistan approves new energy market system allowing consumers to choose electricity suppliers
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Pakistan approves new energy market system allowing consumers to choose electricity suppliers
- Cabinet Committee on Energy has approved an independent entity to transition to multi-player electricity market
- The initiative is expected to help address issues like circular debt, power theft and transmission losses in Pakistan
Pakistan PM gives 48 hours to draft fuel-saving plan as global oil prices surge
- Government warns against hoarding after sharp fuel price hike amid Middle East tensions
- PM wants provinces to enforce anti-profiteering measures and prevent public exploitation
ISLAMABAD: Prime Minister Shehbaz Sharif has asked his administration to formulate a strategy for fuel conservation and austerity in government affairs within 48 hours after a sharp rise in global oil prices pushed the country to increase domestic fuel rates, a senior minister said on Saturday.
The directive comes a day after the government raised petrol and diesel prices by Rs55 ($0.20) per liter, citing a surge in international energy prices triggered by escalating conflict in the Middle East after Israel and the United States launched attacks on Iran. The situation has rattled global oil markets and threatened key shipping routes.
Pakistan’s Information Minister Ataullah Tarar said Sharif had instructed officials to urgently prepare a practical plan aimed at reducing fuel consumption and promoting austerity across government institutions.
“The prime minister has given 48 hours to formulate an actionable strategy on savings, austerity and simplicity in government affairs,” he said in a social media post on X.
Tarar said Finance Minister Muhammad Aurangzeb and Petroleum Minister Ali Pervaiz Malik had also been tasked with consulting the country’s four provincial chief ministers to coordinate measures against fuel hoarding and ensure strict enforcement of government directives.
He informed the ministers had been asked to ensure that speculation and profiteering in fuel markets were prevented, adding that authorities would take strict action against violators.
“The prime minister has directed that no leniency be shown to elements involved in exploiting the public,” he said, warning that licenses of those petrol pumps violating government orders could be revoked.
Tarar also urged the public not to pay attention to rumors regarding petroleum supplies or pricing, saying the government and relevant ministries would continue to release verified information as the situation evolves.
He said Pakistan was not alone in facing rising energy costs, noting that many countries were grappling with similar pressures due to volatility in global oil markets.
Pakistan relies heavily on imported fuel to meet its energy needs and is particularly vulnerable to global price shocks, which can quickly push up inflation and strain the country’s fragile external accounts.
