PM Shehbaz announce major relief in electricity prices

Key Highlights:

Prime Minister Shehbaz Sharif announced a Rs7.41 per unit reduction in electricity prices for domestic consumers and pledged further relief.
The electricity tariff for domestic users is now Rs34 per unit, while industrial rates have been slashed by Rs7.59 per unit.
The announcement follows a government request to NEPRA, with IMF’s approval for a Re1 per kWh cut in utility rates.

PM Shehbaz Sharif Unveils Major Electricity Price Cuts

Web Desk: Prime Minister Shehbaz Sharif, in a special event attended by cabinet members, top business figures, and policymakers, announced a substantial reduction in electricity prices for both domestic and industrial consumers. This move is part of the government’s ongoing efforts to ease economic burdens and stabilize the energy sector.

The reduction, which brings household electricity rates down to Rs34 per unit, also lowers industrial tariffs by Rs7.59 per unit. This decision follows a request to the National Electric Power Regulatory Authority (NEPRA), which is set to hold a hearing on April 4 to finalize the implementation.

Economic Challenges and Achievements

During his address, the prime minister reflected on the challenges his administration faced upon taking office. He emphasized that Pakistan was on the brink of default, and negotiations with the International Monetary Fund (IMF) were initially unfeasible. However, through strategic planning and economic reforms, the country has now regained stability.

Key economic improvements include:

Interest rates dropped from 22% to 12%.
Inflation fell from 38% to single digits.
Petroleum prices remain the lowest in the region.

Shehbaz credited Chief of Army Staff General Asim Munir and his team for their support in stabilizing the economy. He also acknowledged that structural reforms are necessary for sustainable growth and announced upcoming meetings with industrialists to further improve the economic landscape.

Structural Reforms and Future Plans

PM Shehbaz reiterated that economic growth is directly tied to electricity pricing. He stated that progress in industry, trade, and agriculture depends on affordable energy costs. While subsidies are restricted under the IMF program, he asserted that the government prioritized reducing power costs over petrol price cuts.

Discussing negotiations with Independent Power Producers (IPPs), Shehbaz Sharif highlighted that while these companies had made significant profits, they must now contribute to national progress. The government successfully secured agreements that will save Rs3,696 billion, reducing the financial burden on the country.

Additionally, he announced a permanent resolution for the Rs2,393 billion circular debt, ensuring it will be completely eliminated within five years.

NEPRA’s Role in Implementing New Tariffs

NEPRA is set to review the government’s petition on April 4. If approved, the federal government plans to introduce a Rs1.71 per unit subsidy for electricity consumers over the next three months to boost power demand.

For the fiscal year 2024-25, NEPRA had set the national average electricity tariff at Rs35.50 per kWh, while the government has notified a lower average tariff of Rs32.99 per kWh from October 2024, bridging the gap through a tariff differential subsidy.

Conclusion: A Step Toward Economic Stability

With these measures, the government aims to provide direct relief to consumers while strengthening Pakistan’s economy. The prime minister remains committed to making further reforms that will foster growth, stabilize energy prices, and enhance overall economic progress.