ISLAMABAD: Prime Minister Shehbaz Sharif on Wednesday appointed Lieutenant General (retd) Zafar Iqbal as special assistant to the prime minister on energy to oversee the affairs of the power and petroleum divisions of the Ministry of Energy, according to a notification issued by the Prime Minister’s Office.

“The prime minister, in terms of Rule 4(6) of the Rules of Business, 1973, has been pleased to appoint Lt Gen (retd) Muhammad Zafar Iqbal as special assistant to the prime minister on energy, with the status of minister of state, with immediate effect,” the notification said, directing the Cabinet Division to take further necessary action accordingly.

Iqbal has already been overseeing the power and petroleum divisions as head of the National Coordination and Management Council (NCMC), a special forum constituted in April to replace the national coordination committee on prices, led by Finance Minister Muhammad Aurangzeb. The committee was formed soon after the Strait of Hormuz was closed following US-Israeli attacks on Iran on Feb 28.

The NCMC is now overseeing matters relating to the import of crude oil, petroleum products, liquefied natural gas (LNG) and liquefied petroleum gas (LPG), as well as the export of petroleum products such as furnace oil. It is also responsible for setting power generation priorities.

The Power Division and the Petroleum Division of the Ministry of Energy are headed by two full-fledged federal ministers, Sardar Awais Khan Leghari and Ali Pervaiz Malik, respectively.

Advised by international lenders and domestic experts, successive governments have advocated merging the power and petroleum ministries into a single Ministry of Energy to ensure coordinated policymaking rather than pursuing divergent approaches to key issues. However, it was under former prime minister Shahid Khaqan Abbasi that the two ministries were finally downgraded to divisions under the newly created Ministry of Energy.

Subsequent PML-N governments have, however, continued to appoint federal ministers to head both divisions.

Under Rule 4 of the Rules of Business, each division “consists of a secretary to government and of such other officials subordinate to him as the government may determine, provided that the same person may be secretary of more than one division”.

Furthermore, Clause 6 of Rule 4 provides that “there may be a special assistant or special assistants to the prime minister with such status and functions as may be determined by the prime minister”.

Iqbal previously spearheaded renegotiations with private and government-owned power producers under the national task force on energy, which also included Muhammad Ali, now adviser to the prime minister on privatisation.

He subsequently negotiated with commercial banks to secure Rs1.225 trillion in loans to pay off dues owed to independent power producers (IPPs). These payments were to be financed from about Rs4 trillion in savings projected over the 30-year life of the projects. The renegotiations were expected to have a net impact of 33 paisa per unit on the consumer-end tariff, which now stands at around Rs35 per unit, excluding taxes, duties and various surcharges.

The Rs1.225tr in loans also carries a debt-servicing surcharge of Rs3.23 per unit on consumer tariffs for six years.