The federal government is preparing to reduce electricity tariffs by up to Rs. 8 per unit, aiming to provide relief to consumers starting April 1, 2025. The decision, which follows discussions with the International Monetary Fund (IMF), will reflect in electricity bills issued in May.
Sources indicate that a permanent reduction of Rs. 4.73 per unit is planned through multiple financial adjustments. These include scrapping agreements with six independent power producers (IPPs), renegotiating 16 power purchase agreements, and shifting bagasse-based power plants from dollar-based pricing to the Pakistani rupee.
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Additionally, the return on equity (RoE) for government power plants will be reduced to 13%, with the dollar rate fixed at Rs. 168 for these calculations.
Another Rs. 1.30 per unit cut will be temporary, compensating for the government’s decision not to reduce petroleum prices despite declines in the international market. This relief, however, will last for only one month.
Meanwhile, officials are exploring further reductions of Rs. 2 per unit before the final announcement. However, the government will maintain the Electricity Duty in bills, as provinces, particularly Punjab, have opposed its removal. Additionally, the PTV fee of Rs. 35 will be removed from electricity bills starting July 2025.
