PM likely to announce major electricity price cut tomorrow

ISLAMABAD: Prime Minister Shehbaz Sharif is expected to announce a significant reduction in electricity prices tomorrow (Thursday), sources told Wednesday.

According to sources, the per-unit electricity tariff is likely to be reduced by Rs6 to Rs7, with the impact expected to reflect in April’s bills. The relief will come from revised agreements with Independent Power Producers (IPPs) and savings from the captive power levy. 

Consumers will also benefit from adjustments under the quarterly tariff petition, sources added. 

On March 15, the government had maintained petroleum prices, with the prime minister – to avoid backlash – hinting at a significant ‘relief package’ aimed at reducing electricity tariffs.

According to him, the government had opted to provide financial relief to the public by lowering electricity prices instead of adjusting fuel rates. “We have decided to pass on the full financial benefit to the people by reducing power tariffs,” he said. 

Shehbaz Sharif stated that this measure would lead to a meaningful reduction in electricity bills and help ease the burden of inflation. 

A comprehensive package for lowering power rates is in the works, with the government giving it final touches, the prime minister said, adding that an official announcement would be made in the coming weeks. 

Reaffirming his commitment to providing public relief, Shehbaz Sharif said his government prioritised easing the financial burden on citizens from the moment it took office. 

“This initiative will not only bring down electricity prices but also have a positive impact on overall inflation,” he added.

Earlier reports suggested that PM Shehbaz would announce an Rs8 per unit tariff cut in his March 23 address, but no such relief package was mentioned in his Pakistan Day speech. 

On March 25, Federal Energy Minister Awais Leghari reaffirmed that electricity prices would decrease soon, dismissing reports suggesting otherwise. 

Meanwhile, on March 27, the International Monetary Fund (IMF) agreed to a Rs1 per unit reduction in electricity tariffs through revenue generated from the captive power plant levy, ensuring relief for all consumers.

According to the IMF, the relief would be funded through revenue collected from a levy on captive power plants using natural gas. This reduction is part of a broader relief package aimed at easing the financial burden on electricity users.

Official sources estimated that the move could provide consumers with relief of up to Rs100 billion. Under the new plan, a household consuming 500 units of electricity would save Rs500 per month.