ISLAMABAD: Recent statements by Minister of Energy Sardar Awais Leghari concerning K-Electric‘s seven-year Multi-Year Tariff (MYT) have ignited debate, raising concerns among industry stakeholders and analysts. The minister’s suggestion to reduce KE’s tariff under the new MYT to “protect” Karachi residents has left experts questioning its practicality and impact.
Industry analysts point out that under Pakistan’s uniform tariff policy, electricity rates are standardized nationwide, rendering changes to KE’s MYT unlikely to affect consumers’ bills directly. “Even if KE’s utility tariff is lowered, consumers in Karachi will continue to pay the same rates due to the uniform policy,” explained an energy expert.
A key issue adding to the controversy is the Pakistan Holding Limited (PHL) surcharge, which Karachi’s residents have been paying since early 2023, despite contributing minimally to the national circular debt. Critics argue that this surcharge contradicts the minister’s aim of reducing the financial burden on Karachi’s population. “If consumer protection is the goal, the PHL surcharge needs immediate reconsideration,” remarked a local industry analyst.
In a televised appearance, Minister Leghari defended his ministry’s recommendations to NEPRA regarding KE’s MYT, stating they were intended to balance consumer and investor interests. He expressed dissatisfaction with the regulatory framework he inherited and vowed to implement reforms.
Meanwhile, K-Electric CEO Moonis Alvi defended the proposed tariff, emphasizing its alignment with operational needs and the company’s commitment to sustainable growth in its service areas. KE’s existing tariff expired in June 2023, with its renewal significantly delayed. NEPRA has already conducted a stakeholder consultation process, raising questions about the timing of the minister’s remarks.
These developments come as Pakistan seeks to attract foreign investment in its energy sector, including the privatization of other distribution companies (DISCOs). Analysts warn that inconsistent messaging and an ad-hoc approach to tariff reforms could undermine investor confidence.
“Investors, particularly from the Middle East, are closely monitoring Pakistan’s handling of privatization and energy reforms,” noted an energy analyst. For Karachi residents, unresolved issues like the PHL surcharge and delays in infrastructure development highlight the need for a cohesive strategy to address consumer concerns effectively.
