The government is preparing to announce an electricity pricing decrease of Rs8 per unit Electricity Price Cut, with Prime Minister Shehbaz Sharif expected to make the official announcement on March 23, following permission from the International Monetary Fund.
The Ministry of Finance and Power Division is reportedly looking into other options to further lower electricity tariffs by Rs2 per unit. The announcement will be preceded by a final decision.
The reduction is expected to show on May consumer bills and take effect on April 1, 2025. A permanent adjustment of Rs4.73 per unit will replace the Rs8 per unit loss.
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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.
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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.
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