'Good news': PM Shehbaz likely to announce reduction in electricity tariffs today

• PM to announce "big decision" today.
• Premier to meet businessmen in Islamabad.
• IMF had approved reduction of Re1 per unit in power tariff.

ISLAMABAD: Prime Minister Shehbaz Sharif is expected to announce a reduction in electricity prices today (Thursday) following approval from the International Monetary Fund (IMF).

In a statement, Defence Minister Khawaja Asif said that the premier would address the nation today (Thursday) and announce "good news".

"The address will be the result of efforts since 2022… PML-N and coalition government consider national service their top priority," he said, adding that the journey of development and economic recovery would continue.

Separately, sources told Geo News that the prime minister will hold a crucial meeting with leading business figures in Islamabad. The meeting will be attended by cabinet members and 336 business tycoons, during which PM Shehbaz will brief them on power sector reforms.

It is pertinent to mention here that the federal government last month formally submitted a request to the National Electric Power Regulatory Authority (Nepra) for reduction of Rs1.71 per unit in electricity prices.

According to the proposal, the reduction will be facilitated through an increase in the tariff differential subsidy. The proposed cut will apply to all distribution companies, including K-Electric, for the period from April to June 2025. However, lifeline domestic consumers will be exempt from this adjustment.

Nepra has scheduled a hearing on the government’s petition for April 4. If approved, the federal government will subsidise electricity consumers by Rs1.71 per unit during the specified period.

The government aims to introduce this subsidy for three months to boost electricity demand. Nepra had determined a national average rate of Rs35.50/kWh for FY2024-25, while the government notified a lower national average tariff of Rs32.99/kWh from October 2024 onwards, bridging the gap through the tariff differential subsidy.

Earlier, the IMF approved a reduction of Re1 per unit in electricity tariffs, offering relief to all consumers. According to IMF officials, the tariff relief would be extended to all electricity users and financed through revenue generated from the levy imposed on gas-based captive power plants.

The development follows the staff-level agreement (SLA) reached between the Washington-based lender and Pakistani authorities during the first review of the ongoing 37-month bailout programme.

IMF Communications Department Director Julie Kozack confirmed that Pakistan would be disbursed $1.3 billion under the Resilience and Sustainability Facility (RSF), following approval by the Fund’s Executive Board.

A well-placed government source revealed to The News that the government earlier decided to cut the electricity prices by Rs8 per unit, but the decision could not get past the global lender.