Government is set to announce an electricity tariff reduction of 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.
According to sources, the Ministry of Finance and Power Division are exploring additional measures to further reduce electricity rates by Rs2 per unit. A final decision will be made before the announcement.
The reduction, effective from April 1, 2025, will reflect in consumer bills from May. Of the Rs8 per unit cut, Rs4.73 per unit will be a permanent adjustment.
The tariff adjustment results from multiple measures, including the cancellation of agreements with six Independent Power Producers (IPPs), revising contracts with 16 IPPs under a “take-and-pay” model, shifting bagasse power plants’ currency from the US dollar to Pakistani rupees, and lowering the return on equity (ROE) for government power plants (GPPs) to 13%, with the dollar rate fixed at Rs168.
Officials noted that the tariff reduction calculations also account for the impact of lower oil prices in the global market since March 16, 2025. Maintaining current oil prices is expected to save approximately Rs168 billion, allowing a reduction of Rs1.30 per unit in power tariffs.
The IMF has agreed to approve this relief, acknowledging the government’s decision to freeze oil prices for three months. If international oil prices drop further, the financial impact could reach Rs250 billion. However, the Rs1.30 per unit relief will only be available for one month.
The government aims to make Rs6 per unit of the Rs8 reduction a permanent adjustment. Additionally, sources indicate that the Rs35 PTV fee included in electricity bills may be removed starting in July 2025.
For the fiscal year 2026 budget, the government plans to allocate funds to sustain PTV operations without relying on electricity bill collections.
