ISLAMABAD: As the ruling coalition doubles down on its efforts to reduce all-time high tariffs, the Cabinet Committee on Energy (CCoE) on Wednesday authorised the establishment of an independent multiplayer market for power generation and purchase to end the government’s role as a sole buyer of electricity.

In the meeting chaired by Prime Minister Shehbaz Sharif, the committee principally approved the constitution of an Independent System and Market Operator (ISMO) which will be later endorsed by the federal cabinet and registered with the Securities and Exchange Commission of Pakistan under the Companies Act 2017.

“The ISMO is aimed at gradually decreasing the government’s role as a sole buyer of electricity and turning the electricity market into a multiplayer independent, transparent and competitive market,” stated a statement from the Prime Minister’s Office (PMO).

Furthermore, the independent operator will also allow the power consumers to purchase electricity from suppliers other than power distribution companies.

Under the ISMO, long-term planning would be made to produce low-cost electricity and its transmission besides reducing the power prices and circular debt. The ISMO Board will comprise experts from the power sector.

The participants of the meeting were briefed on the circular debt of the power sector.

Speaking on the occasion, PM Shehbaz said the priority measures were being taken for the power sector reforms and instructed accelerated actions to reduce power theft and losses besides taking disciplinary action against the employees of the distribution companies involved in the theft.

The prime minister also directed the authorities concerned to utilise modern technology to bring reforms and curb power theft.

The high cost of electricity has become a contentious political issue, with opposition parties leveraging public dissatisfaction to criticise the incumbent government’s handling of the energy sector and agreements with independent power producers (IPPs).

The burden of high electricity tariffs falls disproportionately on the middle and lower-income segments of society, fueling public outrage and eroding trust in the government’s ability to manage the economy.

Analysts noted that a successful renegotiation with both local and international IPPs would drastically reduce tariffs, boost industrial competitiveness, and increase public trust in the government’s ability to effectively manage the economy.

On the other hand, a failed renegotiation could multiply the tariffs, bringing the government and consumers under added financial strain, crippling industry, and fanning public unrest.

Minister for Planning Development and Special Initiatives Ahsan Iqbal on Tuesday said that the Small Medium Enterprises (SMEs) had the potential of $40-60 billion export in the next 3 to 5 years.

Speaking at the ‘Export-led Economy – Race to $100 billion’ ceremony, along with Minister for Commerce Jam Kamal Khan, he said that the government would facilitates SMEs sector to achieve this potential target.

The minister reaffirmed the government commitment to significantly increasing exports, setting an ambitious target of $100 billion within eight years.

He stressed that achieving this target within eight years, would be beneficial, but in case of missing, it would pose significant challenges.

Ahsan emphasized the need to enhance production and leverage key sectors such as agriculture, manufacturing, and information technology, mining, manpower and creative industries to drive growth.

In order to increase the exports, the government would collaborate with the relevant department/ministries to develop a dashboard, outlining a clear road-map for growth in these sectors, he added.

Similarly, he said that only 70 out of 500 companies on the Karachi Stock Exchange generated exports of around $10,000, and big KSE companies earned billions in profit without contributing to dollar exports.

To address this, he suggested for working on policies and incentives to encourage the private sector to contribute to the country’s exports.

Jam Kamal Khan attributed Pakistan’s export decline to various factors, including high interest rates, production costs, COVID-19, and the Ukraine conflict.

However, he highlighted that the government had formulated a strategy to increase the country exports to $60 billion.

He said that inflation and interest rates had come down consistently while the global investors were interested in investing in Pakistan.

“Investors confidence has restored after International Monetary Fund (IMF) programme”, he remarked.

“In the past, the focus was on textiles, now the focus is on pharmaceutical exports”, he added.

He said : “Pakistan’s economic future depends on significant increase in exports.”

He said that Pakistan’s textile and manufacturing sector exports had increased by 13.8% and 15.9% while agriculture exports increased by 54.8% to reach $7.95 billion in 2024. “Export Development Fund is being used effectively to increase export capacity,” he added.

He highlighted that the role of the private sector in achieving export target was extremely important and Pakistan was capable of more than $100 billion, but definitely there was need of a robust strategy.—APP

Remittances sent home by overseas workers jumped 29% year-on-year (YoY) to $2.849 billion in September from $2.208 billion in the same month last year, latest numbers released by the State Bank of Pakistan (SBP) showed on Wednesday, which anlysts attributed to exchange rate stability.

On a month-on-month basis, inflows were down 3%, from $2.943 billion in August 2024. For the first quarter of FY25, remittances totalled $8.8 billion, reflecting a 39% increase compared to $6.3 billion in the same period of the previous fiscal year.

Brokerage Arif Habib Ltd (AHL) reported that Pakistan received the highest-ever quarterly remittances in 1QFY25.

“The surge was driven by the stability of the rupee exchange rate, a narrowing gap between open and interbank market rates, and an increase in the number of workers relocating abroad,” the AHL noted.

A breakdown shows Pakistanis in Saudi Arabia sent the highest remittances in September 2024, totalling $681.3 million. While this represented a 4% decline on a monthly basis, it marked a 27% increase from $538.3 million in the same month last year.

Inflows from the United Arab Emirates (UAE) rose 4% month-on-month, reaching $560.3 million, up from $538.4 million in August. Year-on-year, remittances from the UAE surged 40% compared to $399.8 million in September 2023.

Remittances from the United Kingdom stood at $423.6 million, an 11% drop from August’s $474.8 million. However, year-on-year inflows improved by 36%.

In the European Union, remittances fell 3% month-on-month to $365.3 million in September.

Meanwhile, Pakistanis in the United States sent $274.9 million, a 15% decrease on a monthly basis.

Mohammed Sohail, CEO of Topline Securities, a brokerage house, in an X post, said these stronger inflows would help Pakistan maintain rupee stability and contain the current account deficit.