Electricity prices witnessed RS 11.33 per unit for industrial and Rs.4.66 per unit domestic decrease since June 2024
Rs. 150 Billion eliminated in cross-subsidies for industrial sector
Rs 55 billion earmarked for 27000 tubewells
Agreemnets with IPPs results in Rs.411 billion national saving
Bijli Sahulat Package with special tariff of Rs.26.07 per unit introduced
Islamabad, Dec 28th, 2024 – The Minister for Power, Sardar Awais Ahmed Khan Leghari, presented a year-end review highlighting key achievements and ongoing initiatives aimed at transforming Pakistan’s power sector. Through innovative policies, substantial investments, and bold reforms, significant progress has been made towards ensuring energy sustainability, reducing electricity costs, and driving economic growth.
The Minister stated, “The power sector has shown marked improvement in electricity prices. The average price of electricity has decreased to PKR 44.04 per unit from PKR 48.70 per unit in June 2024, marking a reduction of PKR 4.66. Industrial electricity prices have also seen a significant drop to PKR 47.17 per unit, down from PKR 58.50 per unit in June 2024, reflecting a reduction of PKR 11.33.”
The Minister presented a detailed overview of reforms undertaken in the last nine months. “We have eliminated PKR 150 billion in cross-subsidies from the industrial sector, a step that has boosted industrial growth and job creation in Pakistan,” he stated. He further emphasized, “The government is diligently working on upgrading the transmission sector, including the trifurcation of NTDC into three entities: the National Grid Company of Pakistan for efficient and reliable transmission, the Energy Infrastructure Development and Management Company for project management, and the Independent System and Market Operator for a competitive and transparent electricity market.”
Discussing distribution-side reforms, the Minister said, “The government is moving towards privatization and concession models, preceded by the hiring of independent Boards of Directors for distribution companies. Circular debt costs are being shifted from electricity bills to the national debt to reduce burden on the consumer”.
The Minister also spoke about the solarization of agricultural tubewells in Balochistan. “We are solarizing 27,000 tubewells at a cost of PKR 55 billion, with a 70% federal government contribution. This initiative will promote green energy and revolutionize the agriculture sector in Balochistan,” he remarked.
On the subject of Independent Power Producers (IPPs), the Minister revealed, “Agreements with five IPPs have been terminated in the first phase, achieving national savings of PKR 411 billion and annual savings of PKR 70 billion. In the second phase, agreements with eight bagasse-based IPPs have been settled, resulting in annual savings of PKR 8.826 billion and national saving of 238.224 billion rupees.” “Negotiation with 16 other IPPs are going on, as a result of that we will have a national saving of Rs. 481 billions”.
The Minister elaborated on the Bijli Sahulat Package, saying, “This package introduces a special tariff of PKR 26.07 per unit for households and industries. Domestic consumers will benefit from savings ranging between PKR 11.42 to PKR 26.00 per unit, while commercial consumers can expect savings of PKR 13.46 to PKR 22.71 per unit. Industrial users will enjoy savings ranging from PKR 5.72 to PKR 15.05 per unit. This initiative underscores our commitment to reducing electricity costs and supporting economic growth.”
Looking ahead, the Minister announced, “We plan to introduce special tariffs for electric vehicles (EVs) under a forthcoming EV policy. This policy will reduce dependency on imported fuels, lower greenhouse gas emissions, and improve air quality. It will also foster economic growth through job creation in local manufacturing and the development of charging infrastructure. This new policy will revolutionize the transport sector of Pakistan”.
He acknowledged the challenges faced by the power sector, including transmission constraints and poor recovery rates, which contribute to PKR 250 billion in losses caused by DISCO inefficiencies. “Efforts to manage the PKR 2.2 trillion circular debt burden are ongoing, with a focus on reducing consumer electricity costs. We are also addressing the impact of dollar-denominated debt exacerbated by PKR depreciation,” he said.
The Minister concluded by reaffirming the Power Division’s commitment to delivering affordable, sustainable, and reliable electricity to the people of Pakistan. “These reforms and achievements reflect our dedication to addressing long-standing challenges in the power sector while building a resilient and prosperous future. With increased economic activity, enhanced employment rates, and lower electricity costs on the horizon, the future of Pakistan looks promising,” he concluded.
