Prime Minister Shehbaz Sharif is expected to announce a reduction in electricity prices by Rs 8 per unit on March 23 after approval from the International Monetary Fund (IMF).
Sources say that the Ministry of Finance and Power Division officials are considering various options to reduce electricity prices by another Rs 2 per unit, which will be finalized before the announcement by the Prime Minister on March 23.
According to sources, the reduction will be effective from April 1, 2025 and consumers will receive lower bills from May.
Sources have been quoted as saying that out of the total reduction of Rs 8 per unit, Rs 4.73 per unit will be a permanent adjustment.
The change comes as a result of cancellation of contracts with six IPPs (IPPs), revision of power purchase agreements with sixteen IPPs to ‘take and pay’ model, transfer of bagasse power plants from US dollars to Pakistani rupees and reduction of Return on Equity (ROE) for Government Power Plants (GPPs) to 13 percent with the US dollar fixed at Rs 168.
Officials also said that the tariff reduction will be calculated taking into account the impact of oil product prices which were reduced in the international market from March 16, 2025.
The estimated fiscal impact of maintaining current oil prices is around Rs 168 billion which will help reduce the cost of electricity by Rs 1.30 per unit.
The IMF has agreed to approve this relief for the government, which recognizes the decision to maintain oil prices for three months and if global prices decline further, its financial impact could reach Rs 250 billion, however, the relief of Rs 1.30 per unit will be available for only one month.
According to sources, the finance and power division officials are considering various options to reduce the price of electricity by another Rs 2 per unit, which will be finalized before the prime minister’s announcement on March 23.
Sources say that the government aims to implement a reduction of Rs 6 out of the Rs 8 per unit reduction as a permanent adjustment.
Sources further say that the PTV fee of Rs 35 is also likely to be removed from electricity bills from July 2025.
In the budget for the upcoming fiscal year 2026, the government plans to allocate funds for the practical operation of PTV.
