Study Finds Pakistan Power Crisis Rooted in Decades of Mismanagement

A new study has concluded that Pakistan's chronic power crisis is the product of decades of structural mismanagement, poor planning, and governance failures — and cannot be attributed primarily to the fallout of recent conflict. The findings challenge a growing narrative that external shocks are the dominant driver of the country's energy emergency.

The report points to systemic issues including capacity payment obligations, circular debt accumulation, inadequate grid investment, and a distorted tariff architecture that has for years insulated consumers from the true cost of electricity while saddling the state with unsustainable liabilities. These structural faults, the study argues, predate any recent geopolitical disruption by several decades.

Pakistan's power sector has been at the centre of economic and political debate, with circular debt exceeding several trillion rupees and per-unit electricity costs rising sharply. Independent power producer agreements signed in the 1990s and 2000s under unfavourable terms continue to burden the national exchequer, limiting the government's room for fiscal manoeuvre.

The study's release is likely to intensify pressure on policymakers to pursue deeper structural reforms rather than seeking relief through short-term financing arrangements. Energy sector analysts have long argued that without renegotiating legacy contracts and overhauling the distribution system, Pakistan's power crisis will persist regardless of macroeconomic conditions.