The Pakistani government is preparing to bring much-needed relief to the public with an electricity tariff reduction of Rs8 per unit. Prime Minister Shehbaz Sharif is expected to make the official announcement on March 23, 2025, following approval from the International Monetary Fund (IMF). This reduction will take effect from April 1, 2025, and will be reflected in consumer bills starting in May.

Breakdown of the Rs8 per Unit Reduction

Out of the total Rs8 per unit decrease, Rs4.73 per unit will be a permanent adjustment. The government is also considering additional reductions of Rs2 per unit before finalizing the plan.

The major contributing factors to this tariff adjustment include:
✅ Termination of Contracts: Cancellation of agreements with six Independent Power Producers (IPPs).
✅ Revised Payment Model: Transitioning 16 IPPs to a “take-and-pay” system.
✅ Bagasse Power Plants: Shifting their currency from US dollars to Pakistani rupees.
✅ Lowered Government Power Plant ROE: Reducing the return on equity (ROE) for government power plants to 13%, with the dollar rate fixed at Rs168.

Impact of Global Oil Prices

The government has also factored in the impact of declining global oil prices since March 16, 2025. By maintaining the current oil prices, the nation is expected to save Rs168 billion, allowing an additional reduction of Rs1.30 per unit in electricity tariffs. This relief, however, will only last for one month.

Removal of PTV Fee in Electricity Bills

Another significant move under consideration is the elimination of the Rs35 PTV fee from electricity bills, which may take effect from July 2025. To ensure the smooth operation of PTV, the government plans to allocate a separate budget for the fiscal year 2026, rather than collecting the fee through utility bills.

A Major Relief for the Public

This electricity price cut comes as a much-needed relief for Pakistani households and businesses struggling with high power costs. With the majority of this reduction expected to be permanent, it signals a significant effort to make energy more affordable for consumers.