As the sun goes down on a warm April evening, fans suddenly fall silent, with Pakistan once again facing a serious electricity shortfall. Earlier this week, the government announced that there would be electricity supply outages for up to 2 hours in most parts of Pakistan; however, reports suggest that power outages have stretched to seven to eight hours in most parts of the country.
The Power Division said, “This step is aimed at reducing the use of costly fuels and preventing a sharp rise in tariffs.” However, this reflects that the power sector is suffering from mismanagement rather than a mere shortage of fuel.
In a recent interview, Energy Minister Awais Leghari said, “When the demand rises above 16,500 MW, the power from gas plants is required. In the absence of gas, the country has no other fuel to fulfil its requirements.” He also acknowledged that the electricity supply cuts have reached six to seven hours due to factors that were out of the government's control. However, these contradictions in government narratives point towards deeper concerns, and the response remains reactive and unconvincing.
The crisis highlights the structural issues in Pakistan’s power generation system, where the installed capacity exceeds 46,000 megawatts, while it confronts power outages that last for up to 12 hours in some areas. This further reinforces the policy failure, poor governance, failure to upgrade transmission lines and inability to finance projects in the energy sector. Apart from this, power theft, outdated transmission systems and inability to collect bills are also major contributors to the prevailing power issue.
Over and above this already fragile setup lies the burden of circular debt, which continues to haunt its financial viability. For the consumer, it's simple: you have to pay a higher cost of electricity for the contracts governments have signed over the years, and at the same time face power outages in the name of “economic load shedding”. A recent statement from the Energy Minister quoted, “We apologise too, but […] the circumstances are such that they are not in our control. Even then, we ought to apologise.”
This recent power outage, lasting hours, covering all parts of the country, serves as a reminder that whether it is economic cost or social cost, it is the public who pays and suffers
On the other hand, businesses have to suffer a lot due to this fluctuation in electricity prices, frequent power outages and inconsistent government policies. With electricity costs rising, the cost of doing business rises, and hence Pakistani exports become less competitive when compared to the region. Similarly, it results in loss of jobs, lower productivity and reduced morale for those working in small and medium-sized enterprises and other cottage industries.
Former Finance Minister Miftah Ismail, while talking to the media on electricity price hikes a couple of months ago, said, “Bangladesh, India, Sri Lanka, Indonesia, Thailand, Cambodia, South Africa, Kenya — these are just some of the countries that may have surpassed us, and when investment doesn’t come in Pakistan, it goes to these countries.” This reinforces the fact that the energy cost being the highest in the region is making us lose out on attracting new investors into Pakistan.
On the contrary, it is to note that the war in the Middle East has played a role in disrupting liquefied natural gas supplies, resulting in loss of power generation along with some disruption in water release patterns as well. But it is very naïve of the government to frame this whole issue as an imported problem, rather than owning the fact that it is a policy failure which goes back to the 1990s.
The good part is that Pakistan today generates about 74% of its electricity from local sources, with high ambitions to increase it further in the next five years. Similarly, the addition of rooftop solar systems has given an opportunity to affluent consumers to exit the grid; however, this also adds the financial burden onto the remaining system, further questioning the future financial viability of the energy sector.
The government needs to bring in structural reforms, improve governance within distribution companies, reduce transmission losses and bring in efficiency in the billing mechanism to tackle these future challenges. They must also focus on drafting a stable energy policy that has continuity and catches the investors’ eye. Energy generation needs to shift from thermal to renewables, investment is needed to improve transmission infrastructure, and bureaucratic friction has to be eradicated at all costs.
Pakistan’s power crisis, just like other issues, is a result of poor choices, ineffective decision-making, short-term focus instead of long-term vision and bureaucratic friction. This recent power outage, lasting hours, covering all parts of the country, serves as a reminder that whether it is economic cost or social cost, it is the public who pays and suffers. Until structural issues are rectified, the common man in this country will keep on facing these hardships under the rhetorical banner of “economic load shedding”.