PM Shehbaz announces reduction in electricity prices

ISLAMABAD: Prime Minister (PM) Shehbaz Sharif on Thursday announced a reduction in electricity prices in a ‘major’ relief to the public.

Addressing an event organised for the announcement, PM Shehbaz revealed that the government has decided to decrease the electricity tariff by Rs 7.41 per unit for domestic conusmers.

The prime minister also announced a reduction of Rs 7.59 rupees per unit for industries.

PM Shehbaz expressed the confidence that the reduction in electricity prices will trigger economic activities in the country. He described the reduction as a gift to the nation on the occasion of Eid.

“I have come to share good news regarding Pakistan’s economic growth on the occasion of Eid. The promise made by Nawaz Sharif in the party manifesto has been fulfilled today,” he said.

“The benefit of the global decrease in oil prices will be passed on to the people in the form of reduced electricity prices,” said the prime minister.

“Fortunately, the IMF has agreed to provide relief”.

He said that successful negotiations with Independent Power Producers (IPPs) will result in a massive saving of Rs3,696 billion. To address the issue of circular debt, which currently stands at Rs2,393 billion, PM Shehbaz said arrangements have been made.

The prime minister also expressed his determination to tackle power theft, which amounts to Rs600 billion annually. He stressed the importance of privatizing all power distribution companies or transferring them to provincial authorities.

Discussing the economic challenges faced by the country, he said that tireless efforts had prevented the nation from defaulting. He expressed satisfaction that the economy has now achieved fundamental stability.

The prime minister commended cabinet members and the Chief of Army Staff for their contributions to the country’s progress. He emphasized that difficult decisions will have to be taken to restore the country’s stature.

PM Shehbaz announced that eliminating the Rs800 billion losses incurred by State-Owned Enterprises is essential, and a mechanism has been devised to address this issue.
He also highlighted the PML-N’s election manifesto promise to bring inflation down to single digits.

He said the inflation rate has been reduced to 1.5%. Furthermore, PM Shehbaz noted that the petrol price has decreased by Rs38 over the last year, and the policy rate has been reduced from 22.5% to 12%.

It is worth noting here that the International Monetary Fund (IMF) has allowed the government to reduce electricity tariffs by Rs1 per kilowatt-hour for all consumers.

The cut in the electricity prices will be financed through revenue collected via a levy imposed on captive power plants using natural gas, the IMF said in a statement.

Following the IMF statement, Pakistan’s Finance Minister Muhammad Aurangzeb announced that the government plans to slash electricity prices soon.

In an interview with a foreign media outlet last month, Aurangzeb revealed that PM Shehbaz was leading the efforts to reduce electricity prices, with an official announcement expected shortly.

Aurangzeb shared that the Pakistan government was working on a budget that expands the tax base to include sectors like real estate, retail, and agriculture.