Pakistan\u2019s Power Division has identified significant weaknesses in the procurement mechanism used by coal-fired power plants to purchase imported coal and has introduced corrective measures aimed at reducing unnecessary costs and improving transparency.<\/p>\n\n\n\n
According to the Power Division, new corrective guidelines have been issued to the National Electric Power Regulatory Authority (NEPRA) concerning the procurement of imported coal. Under the new guidelines, the government expects to achieve annual savings of around Rs380 million at the pre-procurement stage.<\/p>\n\n\n\n
The development follows a series of meetings on coal procurement chaired by Federal Minister for Energy Awais Leghari. During these meetings, officials examined actual procurement data, including existing contracts and prevailing practices in the international coal market. The review was intended to identify weaknesses in the current system and determine where power plants could obtain better commercial terms.<\/p>\n\n\n\n
The Power Division said the government has begun a reform process covering the procurement, import and transportation of coal used by power plants. One of the key changes is the introduction of a \u201cbest available discount\u201d principle for coal procurement.<\/p>\n\n\n\n
Under the proposed mechanism, coal-fired power plants will not be permitted to purchase coal from an international supplier offering a lower discount when a better discount is available from the same supplier or other eligible sources, subject to applicable contractual and regulatory requirements.<\/p>\n\n\n\n
Officials found that different power plants had previously received significantly different discounts from the same coal supplier. According to the Power Division, discounts provided to various power plants ranged from 25 cents to $7.12 per tonne. In some cases, the same supplier offered different discounts to different plants.<\/p>\n\n\n\n
The review also found instances in which backup supply agreements secured better discounts than the corresponding primary supply contracts. Despite these differences, some coal-fired power plants did not purchase coal from suppliers offering the more favorable commercial terms.<\/p>\n\n\n\n
The Power Division said such practices resulted in additional procurement costs. Because fuel expenses are ultimately reflected in the cost of electricity generation, these additional costs were effectively passed on to electricity consumers.<\/p>\n\n\n\n
The government\u2019s latest intervention is therefore aimed at ensuring that power plants make greater use of commercially advantageous offers while maintaining compliance with existing contracts and regulatory requirements.<\/p>\n\n\n\n
Officials said the reforms are based on an analysis of actual procurement data and market conditions rather than simply imposing administrative controls on commercial transactions. The Power Division intends to use data and market analysis to identify inefficiencies and address them through regulatory and policy measures.<\/p>\n\n\n\n
Energy Minister Awais Leghari said the Power Division is using data and market analysis to identify weaknesses in the existing procurement framework. He said the identified shortcomings were being addressed through effective regulatory and policy interventions.<\/p>\n\n\n\n
Leghari emphasized that the purpose of the government\u2019s intervention was not to interfere unnecessarily in commercial affairs. Instead, the objective was to ensure that fuel procurement for electricity generation is conducted efficiently, transparently and at competitive prices.<\/p>\n\n\n\n
He noted that fuel costs associated with electricity generation are ultimately recovered from electricity consumers. Therefore, inefficiencies in fuel procurement can have a direct impact on the cost paid by consumers.<\/p>\n\n\n\n
The minister said the savings generated through the reform measures would be passed on directly to electricity consumers. The government\u2019s objective, he added, is to eliminate unnecessary expenditure and provide genuine relief to power users.<\/p>\n\n\n\n
The issue of imported coal procurement has become increasingly important because fuel costs represent a major component of the overall cost of electricity generated by coal-fired power plants. Even relatively small differences in the price paid for each tonne of coal can translate into substantial costs when procurement volumes are large.<\/p>\n\n\n\n
The Power Division\u2019s findings suggest that inconsistent discount arrangements and failure to take advantage of better offers created opportunities for cost savings. By introducing a more systematic approach to comparing supplier offers, the government expects power plants to obtain more competitive prices.<\/p>\n\n\n\n
The new guidelines will also provide a framework for NEPRA to consider procurement practices when evaluating the fuel costs associated with power generation. The government hopes that greater transparency in procurement will reduce the possibility of avoidable costs being incorporated into electricity tariffs.<\/p>\n\n\n\n
The estimated annual saving of Rs380 million represents the initial benefit expected from reforms at the pre-procurement stage. Further savings could potentially emerge as changes are implemented across coal imports, transportation and supply arrangements.<\/p>\n\n\n\n
The Power Division said the reform process will focus on making the overall coal supply chain more efficient while ensuring that procurement decisions are based on market realities and the best available commercial terms.<\/p>\n\n\n\n
The government\u2019s approach reflects a broader effort to reduce the cost of electricity generation and limit the burden of inefficient fuel procurement on consumers. By using procurement data, market analysis and regulatory oversight, officials aim to ensure that power plants secure competitive fuel prices and that any resulting savings ultimately benefit electricity consumers.<\/p>\n","protected":false},"excerpt":{"rendered":"
Pakistan\u2019s Power Division has identified significant weaknesses in the procurement mechanism used by coal-fired power plants to purchase imported coal and has introduced corrective measures..<\/p>\n","protected":false},"author":1,"featured_media":12564,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-12563","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pakistan"],"featured_image_urls":{"full":["https:\/\/paksouch.com\/wp-content\/uploads\/2026\/08\/11111-2026-08-25T134440.958.png",800,927,false],"thumbnail":["https:\/\/paksouch.com\/wp-content\/uploads\/2026\/08\/11111-2026-08-25T134440.958-150x150.png",150,150,true],"medium":["https:\/\/paksouch.com\/wp-content\/uploads\/2026\/08\/11111-2026-08-25T134440.958-259x300.png",259,300,true],"medium_large":["https:\/\/paksouch.com\/wp-content\/uploads\/2026\/08\/11111-2026-08-25T134440.958-768x890.png",768,890,true],"large":["https:\/\/paksouch.com\/wp-content\/uploads\/2026\/08\/11111-2026-08-25T134440.958.png",800,927,false],"1536x1536":["https:\/\/paksouch.com\/wp-content\/uploads\/2026\/08\/11111-2026-08-25T134440.958.png",800,927,false],"2048x2048":["https:\/\/paksouch.com\/wp-content\/uploads\/2026\/08\/11111-2026-08-25T134440.958.png",800,927,false]},"author_info":{"info":["admin"]},"category_info":"Pakistan<\/a>","tag_info":"Pakistan","comment_count":"0","_links":{"self":[{"href":"https:\/\/paksouch.com\/index.php?rest_route=\/wp\/v2\/posts\/12563","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/paksouch.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/paksouch.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/paksouch.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/paksouch.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12563"}],"version-history":[{"count":1,"href":"https:\/\/paksouch.com\/index.php?rest_route=\/wp\/v2\/posts\/12563\/revisions"}],"predecessor-version":[{"id":12565,"href":"https:\/\/paksouch.com\/index.php?rest_route=\/wp\/v2\/posts\/12563\/revisions\/12565"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/paksouch.com\/index.php?rest_route=\/wp\/v2\/media\/12564"}],"wp:attachment":[{"href":"https:\/\/paksouch.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12563"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/paksouch.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12563"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/paksouch.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12563"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}