The inefficiencies within the power sector, including poor management, outdated infrastructure, and a heavy dependence on foreign fuels, not only harm the economy but also place significant financial burdens on consumers as electricity prices continue to rise.
In an interview with WealthPK, Zulfiqar Ali, CEO of Safeway Renewable Energy, a solar solution provider, highlighted that the aging power distribution and generation infrastructure is a primary cause of the sector’s inefficiencies. “Much of the country’s infrastructure is decades old, lacking essential maintenance and modernization,” he said.
He further explained that increasing transmission losses are driving up electricity prices. “To make matters worse, the sector has struggled to meet the growing demand for electricity due to insufficient investment in upgrading these systems.”
Zulfiqar also pointed out that the country’s limited domestic energy resources and underdeveloped alternative sources, such as wind and solar, make it highly vulnerable to global market fluctuations. “This dependence not only raises costs but also threatens energy security, leaving the sector exposed to external economic shocks.” He added that the absence of a comprehensive, long-term energy policy further complicates the situation. “Policy inconsistencies have made it difficult for policymakers to implement the necessary reforms.”
He emphasized the need for a multifaceted strategy to address both short-term and long-term issues. “Improved resource management is essential, which includes reducing transmission losses, streamlining billing processes, and tackling mismanagement in the sector.”
Speaking to WealthPK, Dr. Naveed Arshad, a member of the LUMS Energy Institute, attributed the power sector’s inefficiency to state-owned enterprises’ dominant role. “The ongoing circular debt, caused by this mismanagement, prevents electricity producers from recovering their costs, further destabilizing the sector’s finances.”
Dr. Arshad noted the significant impact of rising electricity prices on the economy. “High production costs due to elevated energy tariffs make the country’s goods less competitive globally, hindering economic growth and widening the trade deficit.” He also expressed concern over the burden on households, with many struggling to afford their monthly utility bills. “Increasing energy costs disproportionately affect lower-income families, exacerbating poverty and inequality.”
While the government has taken steps to increase electricity generation capacity by building new power plants and investing in renewable energy, the underlying issues remain unresolved. Dr. Arshad suggested long-term investments in modernizing energy infrastructure, diversifying the energy mix, and developing domestic energy resources. “Additionally, promoting energy conservation and efficiency among consumers can help lower overall demand and relieve pressure on the sector,” he concluded.
