Pakistan's ambitious power sector deregulation has triggered a nationwide crisis, resulting in catastrophic financial losses and widespread infrastructure failures that have left millions without reliable electricity.
The Deregulation Decision and Its Immediate Impact
In early 2023, the Pakistani government implemented sweeping power sector deregulation policies aimed at increasing competition and reducing state control. The reforms, championed by then-Energy Minister Ahmed Khan, promised to bring market efficiency and lower electricity prices for consumers.
Instead, the opposite occurred. Within months of implementation, the energy market witnessed chaotic competition among private providers, leading to inconsistent service quality and frequent power outages. Major urban centers, including Karachi and Lahore, experienced rolling blackouts that lasted up to 12 hours daily during peak summer months.
Financial Catastrophe and Infrastructure Collapse
The financial impact has been staggering. Official reports indicate that the deregulation disaster has cost the national economy approximately 45 billion rupees in direct losses, with indirect impacts pushing the total economic damage closer to 120 billion rupees.
Critical power infrastructure suffered immensely under the new system. Maintenance schedules were ignored as private companies prioritized profit margins over system reliability. This neglect resulted in the collapse of three major grid stations in Punjab alone, affecting over 8 million residents and businesses.
Electricity prices skyrocketed by 65% on average across all consumer categories, with industrial users facing the steepest increases. Many manufacturing units have been forced to reduce operations or shut down completely, leading to significant job losses in the textile and automotive sectors.
Government Response and Public Outcry
Public anger has reached boiling point, with protests erupting in multiple cities. Citizens have taken to the streets demanding immediate government intervention to reverse the disastrous policies and restore affordable, reliable electricity.
The current administration has acknowledged the crisis but remains divided on solutions. Some officials advocate for partial re-regulation, while others propose additional market-based measures. Meanwhile, parliamentary committees have launched investigations into the implementation failures and alleged corruption in the deregulation process.
Energy experts warn that without urgent corrective measures, Pakistan's economic recovery could be severely hampered. The manufacturing sector, already struggling with global competition, faces existential threats from unreliable and expensive power supply.
The situation has also drawn international attention, with World Bank and IMF officials expressing concern about the impact on Pakistan's macroeconomic stability and its ability to meet international financial commitments.
