Prime Minister Shehbaz Sharif is expected to announce a reduction in electricity prices during a high-level meeting on the power sector scheduled today. The prime minister will chair the meeting, which will also be attended by key federal ministers.
During the session, PM Shehbaz is address the participants and announce the much-anticipated Rs8 per unit reduction in electricity prices. The meeting is set to take place at 2:00 pm today.
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.
Officials noted that the tariff reduction calculations also account for the impact of lower oil prices in the global market since March 16. 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.
The government aims to make Rs6 per unit of the Rs8 reduction a permanent adjustment. Additionally, sources indicate that the Rs35 PTV fee included in electricity bills may be removed starting in July.
