The present Pakistan Muslim League (Nawaz)-led federal government during its first year in power has been able to reduce the average electricity rate for consumers in Pakistan by 4.96 per kwh.
The Power Minister, Awais Ahmed Khan Leghari, disclosed this in his presentation before the recently convened special meeting of the federal cabinet to review the one-year performance of the government in Islamabad led by Prime Minister Shehbaz Sharif. Leghari told his cabinet colleagues and senior government functionaries that the average per unit cost of electricity in Pakistan had stood at Rs 48.70 inclusive of all taxes in June 2024. He told the cabinet meeting that this average per unit cost of electricity had been reduced by 4.96 due to a decrease in the interest rate, improved governance, and better policies for the power sector unvieled by the present government. He said the per-unit rate of electricity for the industries had been reduced by Rs 11.69 during this one-year period and now stands at Rs 46.81. He said the industries didn’t have to bear anymore the burden of cross-subsidies offered by the government to the power consumers in the other sectors. Leghari told the cabinet meeting that earlier industries had to share the financial burden of the government’s move to subsidise electricity costs for general power consumers. In this regard, the industries have been freed from the heavy fiscal burden to the tune of Rs 151 billion. He said that extending relief to the power consumers in the country financially overburdened due to the high cost of electricity was one of the biggest challenges for the present government. Leghari said the government’s drive to rationalise its expensive power purchase agreements with 104 independent power producers in the country had also met phenomenal success. The Power Minister recalled that a task force led by the prime minister had been formed to deal with the thorny issue of IPPs indulged in producing costly electricity for the national grid. He said that owing to successful efforts of the present government, five furnance oil-based IPPs had been shut down, and the power purchase agreements had been revised in the case of 14 IPPs. Similarly, tariffs of eight bagasse-based IPPs had also been revised. He said the revisions in power purchase agreements with the IPPs would generate an accumulative financial relief for the masses to the tune of Rs 1,333 billion.
Leghari said the plans were afoot to eliminate the menacing problem of circular debt in the energy sector, and a comprehensive plan in this regard would soon be unveiled. He told the cabinet members that general power consumers and industries had been massively benefited by the Baijli Sahulat Package, unveiled by the present government, when the additional electricity consumed by them was supplied at the highly subsidised rate of Rs 26 per unit. He also disclosed that the government wouldn’t purchase the additional electricity to be produced in the country with the abolition of the single-buyer market in the power sector. He said that a competitive market would be established in the country to let the private sector directly purchase electricity from private power producers without the government’s involvement. He said that such an open competitive market would become operational in the energy sector by the end of the current year. A company in this regard will shortly be registered and start working to evolve the new competition-based regime for the sale and purchase of electricity in Pakistan.
Present govt slashes average electricity rate by Rs 4.96/kwh in one year: Awais Leghari
