Islamabad, Apr 3, 2025: Prime Minister Shehbaz Sharif is poised to unveil a long-anticipated reduction in electricity tariffs on Thursday (April 3), expected to Announce a Power Tariff cut today by Rs8 per unit.
A high-level meeting, chaired by the Prime Minister, is scheduled for today, bringing together key federal ministers and senior officials to discuss the reform measures that have facilitated this price reduction.
Power Minister Awais Leghari will brief the gathering on the underlying factors driving the proposed adjustments in electricity pricing.
The planned Power tariff cut results from a series of strategic decisions, including the termination of agreements with six Independent Power Producers (IPPs).
The renegotiation of contracts with 16 other IPPs under a take-and-pay framework. These measures aim to streamline power costs and enhance efficiency in the energy sector.
Further contributing to the price drop is the transition of bagasse-based power plants’ currency denomination from US dollars to Pakistani rupees.
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Along with the revision of the return on equity (ROE) for government-run power facilities, which has been lowered to 13% and fixed at an exchange rate of Rs168.
Reports suggest that the calculations for the tariff reduction also factor in the recent decline in global oil prices since mid-March.
A shift expected to generate government savings of approximately Rs168 billion. These savings could enable an additional Rs1.30 per unit reduction in electricity rates.
The International Monetary Fund (IMF) is anticipated to endorse this price cut, acknowledging the government’s efforts to stabilize the economy while maintaining a three-month freeze on fuel prices.
Beyond the immediate relief on Power tariff cut, the administration aims to make Rs6 of the Rs8 reduction a permanent feature of electricity pricing, ensuring sustained benefits for consumers.
Additionally, discussions are underway regarding the potential removal of the Rs35 Pakistan Television (PTV) fee from electricity bills, with implementation targeted for July 2025.
This electricity price adjustment is a critical component of Prime Minister Shehbaz Sharif’s broader economic strategy, designed to ease financial pressure on the public while adhering to IMF-mandated fiscal guidelines.
As Pakistan continues to grapple with inflation and energy sector challenges, today’s announcement could mark a pivotal moment in addressing economic hardships and restoring public confidence in the government’s financial stewardship.
