Pakistan’s power sector has transformed from an essential utility into a systemic liability. Instead of powering growth, it is dragging down the economy—one policy distortion, inefficiency, and fiscal bailout at a time. We are now at a critical juncture.

Our response to surplus expensive electricity, rising capacity payments, and fiscal pressure has been to penalize industrial self-generation, discourage solar energy, and impose indirect fuel taxes to subsidize electricity tariffs. These are not solutions – they are symptoms of deeper failure. Unless Pakistan decisively reforms its power sector, it risks killing the national grid by its own burden – and taking other sectors with it.

Gas pricing as a weapon:

In a move that illustrates the extent of policy distortion are recently increased gas prices for captive power generation to Rs 4,291 per MMBTU, effective March 7, 2025. This includes a new levy of Rs 791 per MMBTU, and further hikes will raise this to Rs 6,000 per MMBTU by August 2026. The intent is clear: push industries back onto the national grid by making self-generation via gas unaffordable.

This is not market correction; it is coercion. Instead of making grid power competitive through reform, we are rendering industrial alternatives unviable through artificial pricing. In doing so, we’re undermining........

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