Pakistan has moved closer to launching a competitive electricity market after the National Electric Power Regulatory Authority (NEPRA) completed a key regulatory step for the new system.

Federal Minister for Energy Sardar Awais Ahmad Khan Leghari welcomed the decision, saying it clears the way for the Competitive Trading Bilateral Contract Market (CTBCM) auction.

Under the new system, eligible industrial consumers will be able to buy electricity directly from suppliers of their choice instead of depending entirely on the existing single-buyer model.

The government expects competition between electricity suppliers to encourage more efficient power generation and could help bring down electricity costs over time.

Leghari said the new market would allow industrial consumers to enter into direct agreements with power suppliers. This is expected to give consumers more choice and encourage suppliers to offer more competitive rates.

The competitive market could also improve the use of existing power plants and reduce inefficiencies in the electricity supply chain.

The minister said the system would encourage investment in renewable energy and battery storage while helping Pakistan make better use of cheaper local energy sources.

Greater use of lower-cost domestic energy could also reduce the country’s reliance on expensive imported fuels, he added.

The NEPRA decision provides the regulatory framework required for direct access to electricity suppliers and removes a major hurdle for the CTBCM auction.

The government believes the new system will gradually make Pakistan’s power sector more competitive and consumer-focused. However, the impact on electricity prices will depend on how effectively competition develops and how other power-sector costs are managed.

The Ministry of Energy said it is committed to implementing the competitive market in a transparent and efficient manner.