ISLAMABAD – Prime Minister Shehbaz Sharif is expected to announce a significant electricity tariff reduction of Rs8 per unit on March 23. The relief plan has received a green signal from the International Monetary Fund (IMF), according to government sources.
The new power tariff relief will come into effect on April 1, 2025. Consumers will see reduced electricity bills starting from May. Out of the total Rs8 per unit cut, Rs4.73 per unit will be a permanent reduction.
Officials explained that this electricity tariff reduction became possible after several major changes. The government terminated agreements with six Independent Power Producers (IPPs). It also revised Power Purchase Agreements (PPAs) of 16 IPPs under a take-and-pay system. Additionally, bagasse power plants have been linked to the Pakistani rupee instead of the US dollar.
The Return on Equity (RoE) for government-owned power plants (GPPs) has also been reduced to 13%. This calculation will now be based on the local currency. The US dollar value has been fixed at Rs168 for this purpose.
Officials added another important detail. The government decided not to reduce petroleum product prices, even though global rates had dropped from March 16, 2025. The savings from this move, worth Rs168 billion, will help fund a further Rs1.30 per unit power tariff relief.
This Rs1.30 per unit cut, however, will only last for one month. It is a temporary relief added to the main electricity tariff reduction package. The IMF has reportedly approved this short-term relief measure as well. If oil prices keep falling globally, the relief could increase up to Rs250 billion.
Earlier this month, PM Shehbaz Sharif chose to keep petrol prices unchanged. Instead, he decided to pass on the financial benefit through lower electricity prices. His office confirmed that the full benefit of global oil price changes would be transferred to the public via reduced power bills.
The premier said this move is part of a larger plan to ensure electricity tariff reduction for the masses. A detailed relief package is being finalised under a broader strategy. The Prime Minister plans to address the nation soon and announce this major step officially.
