In a significant move aimed at providing relief to the public, Prime Minister Shehbaz Sharif is expected to announce a reduction in electricity prices during a high-level meeting on the power sector scheduled for tomorrow.
According to sources, the prime minister will preside over the meeting, which will be attended by key federal ministers and senior officials from the energy sector. The session, set to take place at 2:00 PM, is expected to address critical issues related to power tariffs and energy sector reforms.
During the meeting, PM Shehbaz is anticipated to officially announce a reduction of Rs8 per unit in electricity prices. This move is part of a broader strategy to lower the financial burden on consumers and introduce long-term stability in the power sector.
Measures Behind the Tariff Reduction
The tariff adjustment is the result of multiple government measures aimed at restructuring the power sector and reducing operational costs. Some of the key actions taken include:
• Cancellation of Agreements with Independent Power Producers (IPPs): The government has scrapped agreements with six IPPs, leading to significant cost savings.
• Revised Contracts with 16 IPPs: Under a new “take-and-pay” model, contracts with 16 IPPs have been renegotiated to enhance efficiency and lower energy costs.
• Currency Adjustment for Bagasse Power Plants: The currency for bagasse power plants has been shifted from the US dollar to Pakistani rupees, minimizing foreign exchange dependency.
• Reduction in Return on Equity (ROE) for Government Power Plants: The government has lowered the ROE for its power plants to 13%, with the dollar rate fixed at Rs168.
Impact of Lower Oil Prices
Officials have also factored in the impact of declining oil prices in the global market since March 16, 2025. The government estimates that maintaining the current oil price levels will result in savings of approximately Rs168 billion. This, in turn, will allow for an additional reduction of Rs1.30 per unit in electricity tariffs.
IMF Approval and Future Plans
The International Monetary Fund (IMF) has agreed to approve the proposed tariff relief. This follows the government’s decision to freeze oil prices for three months, a measure aimed at stabilizing the economy and providing immediate financial relief to consumers.
The government is working to ensure that Rs6 per unit of the Rs8 reduction becomes a permanent adjustment. Additionally, sources indicate that the Rs35 Pakistan Television (PTV) fee included in electricity bills may be removed starting in July 2025, further reducing consumers’ overall costs.
Public and Economic Implications
The proposed reduction in electricity prices is expected to benefit households and businesses alike, lowering production costs and easing inflationary pressures. Analysts believe this move will help improve public confidence in the government’s economic policies and provide much-needed relief amid rising living costs.
The decision is also likely to have political implications, as energy costs remain a major concern for the public. By implementing these reforms, the government aims to demonstrate its commitment to addressing economic challenges and improving the standard of living for citizens.
As the meeting approaches, the public and industry stakeholders eagerly await the official announcement from PM Shehbaz Sharif, which could mark a significant step toward economic stability and affordability in the power sector.
