The government would no longer be responsible for the buying and selling of electricity by 2025, Federal Energy Minister Awais Laghari said on Saturday amid the privatisation of the electricity distribution system.

“The public and electricity companies will be able to mutually benefit by buying and selling cheaper electricity at their discretion,” he said while addressing a press conference in Islamabad.

He mentioned the government’s goal to pull the energy sector out of crisis within the next four years. “Previously, industries were charged over Rs58 per unit, but now they are receiving electricity at a rate of Rs47.17 per unit,” Leghari said and added that the burden of an annual Rs150 billion cross subsidy on the industry has been reduced.

Laghari pointed out that mismanagement and corruption had rendered the electricity transmission system ineffective.

To improve the situation, the prime minister has approved a restructuring plan for the Power Division based on recommendations made by the ministry.

The NTDC would be divided into three entities including the National Grid Company of Pakistan for efficient and reliable transmission, the Energy Infrastructure Development and Management Company for project management, and the Independent System and Market Operator for a competitive and transparent electricity market.

Leghari expressed the hope that privatisation of three power distribution companies (DISCOs) would be completed by end of next year.

While sharing the last nine months performance of power sector, the minister said the government was moving towards privatisation and concession models and already appointed members of board of directors of DISCOs “purely on merit.”

Circular debt costs were also being shifted from electricity bills to the national debt to reduce burden on the consumers, he added.

He said the average price of electricity has decreased to Rs44.04 per unit from Rs48.70 per unit. Similarly, average power tariff for industrial consumers has also decreased to Rs47.17 per unit from Rs59.50 per unit, he added.

Both the domestic and industrial consumers have seen Rs4.66 per unit and Rs11.33 per unit decreases respectively in the tariff since June 2024.

He claimed that the government has eliminated Rs150 billion in cross-subsidies from the industrial sector.

Regarding IPPs, he said agreements with five IPPs had been terminated in the first phase which would help savings of Rs411 billion. In the second phase, agreements with eight bagasse-based IPPs have also been settled which resulted annual savings of Rs8.826 billion and overall saving of Rs238.224 billion, he added.

He said talks with 16 more IPPs were going on and it would help saving additional Rs481 billion to the national exchequer.

While speaking about switching agricultural tube-wells on solar in Balochistan, the minister said that 27,000 tube-wells were being solarised. The project would cost Rs55 billion for which 70 per cent share was being provided by the federal while remaining 30 per cent by the provincial government.

(With input from APP)