Prime Minister Shehbaz Sharif Orders Electricity Tariff Reduction by Rs. 7 Per Unit Across Pakistan
Prime Minister Shehbaz Sharif has directed the Power Division to reduce electricity tariffs by Rs. 7 per unit for all consumer categories across Pakistan, including Karachi. This move follows consultations with the International Monetary Fund (IMF) and comes as part of the government’s efforts to ease the financial burden on consumers.
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The decision was made during discussions last week, which led to the expansion of the “Tariff Reduction Committee,” now headed by Deputy Prime Minister and Foreign Minister Ishaq Dar. The committee is expected to finalize the tariff reduction plan by February 10, 2025, with the implementation scheduled for April 1, 2025.
The proposed Rs. 7 per unit relief will be achieved through several measures: revised agreements with independent power producers (Rs. 2 per unit), removal of federal and provincial taxes (Rs. 3 per unit), and a reduction in the Return on Equity for government-owned power projects.
Currently, taxes and surcharges account for 40 percent, or approximately Rs. 964 billion, of electricity bills, with Rs. 391 billion contributed by the federal government and Rs. 563 billion by the provinces. The Finance Division has expressed concerns over eliminating these taxes, fearing it could undermine fiscal targets and revenue collection, particularly in light of Pakistan’s ongoing $7 billion bailout agreement with the IMF.
Additionally, the government has decided to close legal proceedings against independent power producers accused of generating abnormal profits.
