Regulating energy sector

These sectors must be independent in regulation to strike a balance between the government, stakeholders & consumers


Editorial August 22, 2019

In this age of deregulation, we are mulling the opposite – in case of our power and gas sectors. The argument is that these sectors must be independent in regulation matters so as to try and strike a balance between the government, stakeholders and consumers. Maintaining a balance is critical. This takes on further significance in countries like ours where the infrastructure is not that developed and the pool of stakeholders, particularly on the production side, is quite small. Also thrown in the mix is the complexity of subsidies and some foreign advice.

With that in view, there has been a suggestion to grant greater autonomy to the National Electric Power Regulatory Authority (Nepra) and the Oil and Gas Regulatory Authority (Ogra), the oil and gas regulators respectively. In a perfect world, these organisations would regulate their respective sectors. But ours is a country whose ranking on corruption indexes suggests that everyone must be looked at with doubt unless proven otherwise. Indeed, the parliament’s Public Accounts Committee has already called for a complete audit of Ogra while suspecting that those who had violated the rules had been let off the hook.

The government has thus decided to set up new appellate tribunals under new electric power legislation to hear those not satisfied with the determination of the regulator and to help avoid unnecessary and long-drawn-out legal proceedings. If this system proves successful, it could be replicated for Ogra as well. Under a democratic system, the ultimate regulator has to be the public – or their elected representatives through parliamentary bodies. While these bodies exist at the levels of the lower and upper houses of parliament, they are only moderately powerful and can merely recommend cases to accountability bodies such as the National Accountability Bureau and the Auditor General of Pakistan. Maybe, this is time these bodies were strengthened and the public was sufficiently empowered. 

Published in The Express Tribune, August 22nd, 2019.

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