Islamabad: In a major relief for consumers and businesses, Prime Minister Shehbaz Sharif on Thursday unveiled a substantial reduction in electricity tariffs, slashing rates by Rs7.41 per unit for residential users and Rs7.59 per unit for commercial consumers.
“With this reduction, electricity will now be provided at Rs34.37 per unit for residential consumers,” the premier announced during a ceremony, emphasizing that lower power costs are crucial for boosting industrial growth, agriculture, trade, and exports.
The move follows a *15% month-on-month decline in power generation, which hit a five-year low of *6,945 GWh in February 2025, signaling reduced economic activity.
Shehbaz highlighted that the government reached this decision after extensive deliberations with the IMF, ensuring compliance with its conditions while striving for economic progress.
Relief for Millions of Consumers
Under the new tariff structure, 20 million electricity consumers will now benefit from significantly reduced rates:
10 million consumers will pay Rs11.51 per unit.
800,000 consumers will pay Rs9.37 per unit.
7.4 million consumers will pay Rs8.52 per unit.
1.5 million consumers will pay as low as Rs4.78 per unit.
For 18 million consumers, electricity tariffs have been slashed by 50% since June 2024.
Strategic Reforms and Savings
PM Shehbaz reiterated the urgency to privatize or hand over power distribution companies (Discos) to provinces, ensuring efficiency and sustainability.
He credited negotiations with Independent Power Producers (IPPs) for achieving savings of *Rs3,669 billion, which would have otherwise been payable in the coming years. Additionally, the government has outlined measures to address the *Rs2,393 billion circular debt crisis.
Federal Energy Minister Sardar Awais Leghari lauded these reforms, attributing the tariff reduction to renegotiated contracts with 16 IPPs, termination of agreements with six others, and critical adjustments such as:
Shifting bagasse power plant tariffs from USD to PKR.
Reducing return on equity (ROE) for government power plants to 13%, fixed at an exchange rate of Rs168.
