Power Minister defends EMO, calls for review of LNG contracts

ISLAMABAD, July 10, 2025 – Minister for Power, Sardar Awais Ahmad Khan Leghari, on Thursday strongly defended the Economic Merit Order (EMO), calling any attempt to alter it a “grave sin” (Gunnah Kabeera). He urged the Petroleum Division to review LNG contracts, if needed, just as the Power Division did with agreements involving Independent Power Producers (IPPs).
Leghari made these remarks during a press conference focused on the performance of Distribution Companies (DISCOs) in reducing power sector losses.
Highlighting improved operational efficiency, the Minister revealed that Pakistan saved Rs191 billion in FY 2024–25. Power sector losses were reduced to Rs399.7 billion, down from Rs590.9 billion the previous year.
“This significant reduction is due to better performance by DISCOs,” he noted.
Responding to remarks by Petroleum Minister Ali Pervaiz Malik about losses in LNG supply due to low consumption by power plants, Leghari clarified that Malik’s comments referred to contracts signed by previous governments.
“Ali Pervaiz Malik is a close friend. His concerns are valid if the contracts are flawed,” Leghari said.
“Power plants operate based on the EMO, which prioritizes electricity generation from the cheapest sources. If RLNG plants don’t qualify under EMO, they simply can’t be run,” he explained.
“I consider any change in EMO a grave sin. If there are problems with LNG contracts, they must be reviewed just as we reviewed the IPP agreements.”
On net metering, the Minister announced that work on a revised rate of return is complete. A summary will be submitted to the Federal Cabinet within the next one to two weeks.
“Our aim is to ensure that net metering remains sustainable and doesn’t place a financial burden on other electricity consumers,” he said.
Speaking about K-Electric (KE) and its Fuel Cost Adjustment (FCA), Leghari stated that the Power Division may seek a review of NEPRA’s recent decision, particularly since the Cabinet has a role in policy oversight.
“K-Electric is currently drawing 1,600 MW from the national grid, and this could increase to 2,000 MW,” he said.
“If KE draws more power from the national grid, a uniform tariff should be applied to ensure fairness.”
On the Competitive Trading Bilateral Contract Market (CTBCM), Leghari confirmed that a summary will be submitted soon to the Cabinet for final approval.
He also shared updates on surplus electricity:
“We are in talks with the IMF and international development partners on the utilization of 7,000 MW of surplus electricity at discounted rates to support economic growth.”