Govt slashes cross-subsidy by Rs123bn, cuts electricity prices

The federal government has taken major steps to reduce the electricity burden on consumers by cutting cross-subsidies by Rs123 billion, bringing it down from Rs 225 billion to Rs 102 billion.

This has helped lower electricity rates across the country. Industrial tariffs, including taxes, have fallen from Rs62.99 to Rs46.31 per unit, while the overall electricity price per unit has dropped from Rs53.04 to Rs42.27.

The government has also closed inefficient power plants and successfully negotiated with Independent Power Producers (IPPs), ensuring a more stable and affordable electricity supply.

Consumers will also benefit from a special three-year package offering additional electricity at Rs 22.98 per unit, and ongoing efforts to eliminate circular debt will provide further relief of Rs 3.23 per unit once completed.

The increase in protected consumers—now doubled to 22 million thanks to off-grid solar users—has put some extra pressure on the power sector, but commercial and public supply consumers are still benefiting from the reduced cross-subsidy burden.

The government says these measures are part of its broader social and economic policy and that further reforms and debt refinancing will continue to keep electricity affordable for everyone.