BY involving the FIA in the exercise, the government has admitted that the ongoing crackdown against power and gas theft in the country has so far failed to produce the desired results since its launch last September. The anti-theft drive led by the utilities, with support from the provincial administrations, seems to have already lost its initial momentum. The decision to bring in the FIA to energise the campaign seems to be driven by an IMF statement that restoring the “energy sector’s viability” would be one of the four key areas of reforms under the Fund’s next medium-term loan that Pakistan is seeking for reducing its external sector vulnerabilities and shoring up international reserves. Even at the peak of the campaign between September and December, the effort had resulted in power theft reduction of just Rs14bn, and arrear and detection bill recoveries of Rs58bn. That compares with a total electricity theft of Rs237bn in 2022. In September 2023, the caretaker set-up had put power sector losses at Rs589bn. In 2020, the Prime Minister’s Inspection Commission had found almost $2bn worth of annual losses in the gas supply chain due to theft and other factors.

That power and gas theft is a major contributor to the combined energy sector circular debt, which has shot up to over Rs5tr, is no secret. Over the next several weeks, we may be fed ‘success stories’ until the euphoria fades away. Complete elimination of energy theft, the cost of which is being paid by honest consumers in the shape of higher tariffs or through budget subsidies, is imperative to stop the growth of the circular debt and reduce electricity and gas prices, a major reason why people steal power and gas. However, the government cannot control the situation with administrative measures alone. It will have to invest in distribution infrastructure and quickly move towards smart metering if it wants to achieve lasting results.

Published in Dawn, March 23rd, 2024