Crippling power sector

Pakistan's electricity and broader energy sector is no longer merely under strain; it is steadily collapsing under the weight of its own contradictions. The latest official performance reports lay bare the unsustainable business model propped up by subsidies and riddled with inefficiencies.

In the last fiscal year, the power sector's equity turned negative by Rs800 billion, with total liabilities swelling to Rs9.2 trillion against assets of Rs8.4 trillion. This is not a temporary imbalance but a structural failure, driven by persistent losses at DISCOs, rampant electricity theft, tariff lags, re-pricing at generation companies, and the ever-expanding circular debt. Revenues fell to Rs3.9 trillion, a 4 per cent decline, even as the cost of keeping the system afloat soared. To prevent a total breakdown, the government injected over Rs1 trillion in subsidies in a single year.

Yet despite this massive fiscal support, six out of ten DISCOs remained in the red during the first full year of the current government. What is often underplayed is that major cities now face an acute and entrenched theft problem that has lingered for decades, quietly hollowing out the system from within. This is precisely where a sustained and credible clampdown must begin. Without enforcing the writ of the state in metropolitan centres, efforts to stabilise the power sector will remain futile.

Privatisation, long touted as the solution, has so far failed to inspire confidence. While power distribution companies are firmly on the privatisation list, there is little appetite among investors to dip their hands into entities burdened with legacy losses. A credible long-term strategy, therefore, must be two-fold. First, there must be an uncompromising and sustained crackdown on electricity theft, particularly in major cities where losses are now both acute and avoidable. Second, the system must incorporate sustainable and affordable energy pathways that ease the burden on consumers rather than punishing them for institutional failure.