The government is set to slash electricity tariffs by Rs8 per unit, with Prime Minister Shehbaz Sharif expected to make the official announcement on March 23, following approval from the International Monetary Fund (IMF), Express News reported.
Sources indicate that the Ministry of Finance and Power Division are considering additional measures to further reduce rates by Rs2 per unit, with a final decision expected before the announcement.
Effective from April 1, 2025, the reduction will reflect in consumer bills from May. Of the Rs8 per unit cut, Rs4.73 will be a permanent adjustment. The tariff reduction stems from multiple measures, including:
- Cancellation of agreements with six Independent Power Producers (IPPs)
- Revised contracts with 16 IPPs under a “take-and-pay” model
- Shifting currency for bagasse power plants from US dollars to Pakistani rupees
- Lowering Return on Equity (ROE) for government power plants (GPPs) to 13%, with the dollar rate fixed at Rs168
Officials note that lower global oil prices since March 16, 2025, have also contributed to the adjustment. If current oil prices hold, savings of approximately Rs168 billion could enable an additional Rs1.30 per unit reduction, albeit for only one month. If oil prices fall further, the financial impact could reach Rs250 billion.
The IMF has endorsed this relief package, acknowledging the government’s move to freeze oil prices for three months. Additionally, the Rs35 PTV fee included in electricity bills may be scrapped starting in July 2025, with alternative funding planned in the fiscal year 2026 budget.
