Pakistan is set to deregulate electricity prices in the country with country’s first ever Competitive Energy Market (CEM) in the coming weeks as the South Asian nation grapples with humongous circular debt and unpaid subsidies. The new policy aims to end government-led purchasing, shifting the sector to open-market competition.
During a meeting with a World Bank delegation led by Ousmane Dione, Regional Vice President for the Middle East, North Africa, Afghanistan, and Pakistan, Energy Minister Leghari announced that Pakistan will launch its first Competitive Energy Market Policy within two months.
According to the energy ministry, the new policy will mark a transition from government-led electricity purchasing to a market-based model under the Competitive Trading Bilateral Contract Market (CTBCM).
This model will enable direct electricity trade between producers and consumers, incorporating mechanisms such as wheeling charges. Leghari said the government will no longer procure power, instead focusing solely on regulation.
The move is intended to improve transparency and efficiency in the power sector. It comes as Pakistan struggles with mounting circular debt, subsidies, and unpaid bills that have severely strained the power sector and the broader economy. The government currently controls much of the country’s electricity infrastructure, adding urgency to reform efforts.
