Pakistan's Energy Sector Faces Repeated Central Control

Pakistan’s power sector continues to experience repeated centralization of control despite the establishment of regulatory bodies and corporate structures. Operational management, regulation, and energy planning remain intertwined, with consumers bearing the financial burden through tariffs, surcharges, and taxation.

The restructuring of WAPDA and the creation of PEPCO were intended to produce distribution companies with independent commercial authority. However, current practices suggest that PPMC maintains significant influence over decision-making, limiting the autonomy of boards such as that of HESCO.

The ministry secretary, acting as Principal Accounting Officer, holds substantial control over appointments, procurement, and operations. This concentration of authority blurs the lines between policy-making and operational management, leaving boards and management without clear decision-making power.

The vast revenues collected through electricity and gas bills often bypass parliamentary scrutiny, allowing costs to be passed to consumers or taxpayers. This lack of transparency weakens incentives to manage spending effectively and risks long-term financial commitments that may outlast their initial assumptions.

Integrated energy planning is essential for economic efficiency, as electricity, gas, and other energy sources are interconnected. A dedicated secretariat under the Cabinet Division could provide the institutional framework needed for coordinated, economy-wide planning, drawing on expertise from multiple sectors.

Regulators such as NEPRA and OGRA face challenges due to repeated government intervention in pricing and classification. Their independence is compromised when regulatory decisions are treated as extensions of civil service. Appointments to regulatory roles should prioritize expertise and independence over bureaucratic seniority.