ISLAMABAD: Prime Minister Shehbaz Sharif is expected to announce a long-awaited decrease in electricity prices Thursday (Apr 3), with the new price expected to be lowered by Rs8 per unit.
An important meeting chaired by Prime Minister Shehbaz Sharif is set to take place today, featuring key federal ministers and senior officials.
The meeting will focus on various reforms in the energy sector that have led to the recent price decrease, with the power minister Awais Leghari giving an overview of the factors behind the proposed changes.
Cut in power rates: PM to announce package
The expected price reduction stems from several strategic measures, including the termination of agreements with six Independent Power Producers (IPPs) and the renegotiation of contracts with 16 other IPPs under a take-and-pay model.
Additionally, the conversion of baggasse power plants’ currency from US dollar to Pakistani rupees and a reduction in the return on equity (ROE) for government power plants to 13%, fixed at an exchange rate of Rs168, have been critical in recalibrating electricity tariffs.
The reports indicated that the calculations for the tariff reduction also take into account the recent decline in global oil prices since mid-March, which is expected to save the government approximately Rs168 billion. This saving is projected to facilitate an incremental Rs1.30 cut in power tariffs.
The International Monetary Fund (IMF) is expected to endorse this announcement, recognizing the government’s efforts to stabilize the economy by freezing fuel prices for three months.
In addition to the anticipated cuts, the government aims to make Rs6 of the Rs8 reduction a permanent fixture in electricity pricing.
There are also reports regarding the possible elimination of the Rs35 Pakistan Television (PTV) fee linked to electricity bills, with implementation expected by July 2025.
This electricity price reduction is part of Prime Minister Sharif’s broader economic agenda, which aims to alleviate the financial burden on consumers while maintaining compliance with IMF guidelines.
As the country grapples with economic challenges, including inflation and energy shortages, today’s announcement could signal a significant step towards easing public discontent and restoring confidence in the government’s fiscal management.
Copyright Business Recorder, 2025
Comments
Comments are closed for this article.