Govt working on options to reduce electricity tariff by Rs10 per unit

ISLAMABAD: The federal government is working on various options to reduce electricity tariff by Rs10 per unit.

According to sources, under the first option, the federal government is working to pass on the benefit of the termination of contracts with independent power producers (IPPs) to the people.

After terminating the contracts with five IPPs, the government will save a total of Rs411 billion, which stands at Rs70 billion annually.

Sources at the Ministry of Energy and Power Division said that the change in the tariff of eight Bagasse-based power generation plants will result in saving Rs238 billion, which stands at Rs8.83 billion annually.

Further termination of contracts with 16 more IPPs will result in saving of Rs481 billion. This termination or modification of IPPs’ contracts will be passed on to consumers, the sources said.

According to sources, the federal government is also evaluating the expansion of the winter electricity facility package for providing cheap electricity to consumers.

As part of a special winter package, electricity prices have been slashed by Rs20 to Rs30 per unit.

The new initiative aimed at reducing electricity prices and encouraging higher usage in the winter months.

The sources said that a proposal to reduce the burden of taxes on electricity bills is also under consideration.

Sources further said that with all these measures, the government wants to reduce electricity rates by Rs10 per unit.

Earlier, Federal Energy Minister Sardar Awais Ahmed Khan Laghari said that the government has been renegotiating contracts with IPPs to bring down costs.

He had said that discussions have already been finalised with five IPPs, resulting in savings of Rs411 billion.

He had said that these revised contracts will be implemented in the coming days, and further agreements are expected to generate even more savings.

According to sources, the ministry of energy is also working on a plan to improve the transmission system and develop infrastructure for electric vehicles. Charging stations for electric vehicles will be established across the country as part of the government’s strategy to meet growing electricity demands.