IPPs negotiations lead to electricity price cuts and $17bn in savings: Leghari

ISLAMABAD: Federal Minister for Energy Owais Laghari on Sunday said the government has abandoned the procurement of expensive electricity totalling around 8,000 megawatts purely on merit, a move expected to save the country over $17 billion.

Addressing a news conference in Islamabad, Laghari criticised NEPRA for failing to acknowledge the achievements of the current federal government in the power sector. He also slammed NEPRA’s claim regarding a Rs780 billion reduction in circular debt, calling it misleading.

Laghari clarified that the reduction comprises Rs193 billion due to lower DISCO losses, Rs260 billion achieved through successful negotiations with Independent Power Producers (IPPs), and approximately Rs300 billion resulting from improvements in macroeconomic indicators. “All these figures were formally shared with NEPRA, so its apparent ignorance is surprising,” he said.

The federal minister emphasised that circular debt has not increased and is, in fact, benefiting consumers this year. The national average electricity price has dropped significantly, from Rs53.04 per unit in 2024 to Rs42.27 per unit by December 2025.

On circular debt reduction, Laghari said the government’s comprehensive power-sector reforms have increased dues recovery from government departments. Under this mechanism, 25 per cent recoveries—amounting to Rs183 billion—are being made through the federal adjuster against verified bills.

He added that the federal government is also covering a Rs40 billion billing burden incurred by power distribution companies, ensuring these losses are not passed on to consumers. Additionally, electricity users nationwide have been given the option to read their own meters, enhancing billing transparency.

“These measures reflect the government’s commitment to protecting consumers while improving efficiency and sustainability in the electricity sector,” Laghari said. “They are estimated to save the country over $17 billion.”