PM Shehbaz Sharif to Cut Power Tariffs by Rs. 8 per Unit from April 1, 2025
Prime Minister Shehbaz Sharif is set to announce a reduction of Rs. 8 per unit in electricity tariffs on March 23, following approval from the International Monetary Fund (IMF). The revised tariffs will be effective from April 1, 2025, with consumers expected to see lower bills in May.
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Breakdown of the Tariff Reduction
According to a report from a national daily:
- Permanent Reduction (Rs. 4.73 per unit):
- Cancellation of agreements with six Independent Power Producers (IPPs).
- Revision of Power Purchase Agreements (PPAs) for 16 IPPs to a take-and-pay model.
- Delinking of bagasse power plants from the US dollar to the Pakistani rupee.
- Reduction in Return on Equity (RoE) for government power plants (GPPs) to 13%, with the US dollar fixed at Rs. 168.
- Temporary Reduction (Rs. 1.30 per unit for one month):
- This relief accounts for the government’s decision not to lower petroleum prices, despite a drop in international oil prices since March 16, 2025.
- The financial impact of maintaining current petroleum prices is estimated at Rs. 168 billion.
- If global oil prices continue to fall, this could impact government finances by Rs. 250 billion.
Additional Potential Relief
Officials from the Finance and Power Divisions are considering an additional Rs. 2 per unit reduction, which could be finalized before March 23. The government aims to make Rs. 6 of the Rs. 8 per unit reduction permanent.
PTV Fee Removal from Electricity Bills
The government has decided to remove the Rs. 35 Pakistan Television Corporation (PTV) fee from electricity bills starting July 2025. In the FY2026 budget, funds will be allocated separately to ensure PTV’s operations continue without burdening electricity consumers.
This reduction in electricity tariffs is expected to provide significant relief to consumers and boost economic activity by lowering energy costs.
