PM Shehbaz announces major electricity rates cut by Rs7.41 per unit

Prime Minister Shehbaz Sharif announced on Thursday a reduction of Rs7.41 per unit in electricity prices for domestic consumers, with the aim of providing further relief to the people of Pakistan. This decision brings the cost of electricity for domestic users down to Rs34 per unit. Additionally, the prices for industrial units have been lowered by Rs7.59 per unit.

The announcement, made at a special event attended by cabinet members, business leaders, and other key figures, follows the government’s request to the National Electric Power Regulatory Authority (Nepra) for a price cut. This request was approved by the International Monetary Fund (IMF), which gave the green light for a Re1 per kilowatt reduction in electricity prices.

In his speech, Prime Minister Shehbaz emphasized the challenges faced by his government, noting that Pakistan was on the brink of default when his administration took office. He credited his government’s hard work and the support of Chief of Army Staff General Asim Munir for stabilizing the economy. Despite ongoing hurdles, Shehbaz highlighted that Pakistan now has the lowest petroleum prices in the region.

The Prime Minister also pointed out that significant progress had been made in reducing interest rates from 22% to 12%, and inflation had decreased from 38% to single digits. He revealed plans to meet with industrialists to discuss further economic improvements and stressed that structural reforms would be key to long-term growth.

Shehbaz added that while Pakistan’s economy had made significant strides, the path to full recovery still required continued efforts, particularly in the areas of electricity pricing. He argued that economic growth in industry, trade, and agriculture could not proceed without reduced power costs.

The Prime Minister also addressed independent power producers (IPPs), acknowledging their past profits and calling on them to contribute to the nation’s benefit. He assured that a permanent solution had been developed for the Rs2,393 billion circular debt, with plans to eliminate it completely within five years.

Nepra is set to hold a hearing on the government’s petition on April 4. If approved, the government will provide a Rs1.71 per unit subsidy to electricity consumers for three months to stimulate demand. The government has also notified a new national average electricity tariff of Rs32.99 per kWh, effective from October 2024, bridging the gap with a tariff differential subsidy.