Islamabad: During a policy dialogue titled “Fiscal Strategies for Energy Sector FY25: Budgetary Allocations and the Tariff Dynamics,” experts stressed the need for strategic tariff rationalization and a shift towards renewable energy solutions to address the challenges in Pakistan’s power sector.
Dr. Abid Qaiyum Suleri, Executive Director of the Sustainable Development Policy Institute (SDPI), highlighted the multifaceted problems with the current tariff system, including faulty agreements with Independent Power Producers (IPPs) and energy circular debt. He proposed approaches such as tariff rationalization, transitioning to clean energy sources, and diplomatic negotiations for international arbitration and commercial dispute resolution.
Speakers criticized the government’s contradictory actions in managing the energy sector and the economy, calling for a reconsideration of supply-side economics and a more transparent and inclusive policymaking process. They emphasized the need to address political issues alongside economic and energy problems and highlighted the importance of engaging with international development partners from a position of strength.
The experts also discussed the need for targeted subsidies, energy governance, and increasing electricity consumption through tariff rationalization and shifting towards indigenous energy sources like Thar coal and renewable energy. They proposed early retirement of thermal power plants to address capacity charges and reduce tariffs.
The dialogue emphasized the importance of understanding diverse perspectives on the recently announced budget, electricity tariff increases, and the way forward for both residential and industrial consumers.
