PM Shehbaz likely to announce Rs8/unit cut in power tariff on March 23

Prime Minister Shehbaz Sharif is expected to announce a reduction of Rs8 per unit in the price of electricity on March 23 after approval from the International Monetary Fund (IMF).

According to sources, officials of the Finance Ministry and power division are considering various options to reduce the price of electricity by another Rs2 per unit, which will be finalized before the announcement by the prime minister on March 23.

This reduction will be implemented from April 1, 2025 and consumers will get to see less bills from May.

The sources said that out of the total reduction of Rs8 per unit, Rs4.73 per unit will be a permanent adjustment.

The change comes as a result of cancellation of contracts with six IPPs, revision of power purchase agreements with 16 IPPs to ‘take and pay’ model, transfer of Bagass power plants from US dollars to Pakistani rupees and reduction of return on equity (ROE) for government power plants (GPPs) by 13 per cent, in which dollar was fixed at Rs168.

Officials also said that the tariff reduction will be calculated taking into account the impact of prices of oil products that were reduced in the international market with effect from March 16, 2025.