Pakistan Institute of Development Economics

Webinars Brief 20:2020
Pide Energy Roundtables
Publication Year : 2020
Author: Afia Malik

Circular debt has been with us for 12 years. Pakistan has suffered huge losses (cumulated loss of more than Rs 5 trillion). We tend to hide behind the term circular debt without any clarity. Pakistan has lurched from an excess demand to excess supply of energy and has whimsically played around with the energy mix. While the world is moving to renewables we are investing heavily in coal. We need to design a system where losses costs are minimized to produce energy competitively. Where prices are not made volatile by arbitrary taxation and regulation works for the poor. We need a competitive electricity market with minimum government interference. The sector experience shortages not due to lack of supply, but mostly because of the financial issues of the distribution companies (DISCOs). Weak governance and mismanagement are prevalent in the distribution sector. There is no clarity on how the energy sector is being regulated; whether we have state of the art pricing frameworks. NEPRA is the regulator, yet the final decision-making is done at the energy ministry.