PM Likely to Announce Rs. 8 Per Unit Power Tariff Cut on March 23

Prime Minister Shehbaz Sharif is set to reduce power tariffs by Rs. 8 per unit, on March 23, following approval from the International Monetary Fund (IMF). This decrease will take effect on April 1, 2025, with consumers expected to see lower bills starting in May.

According to a report by a national daily, the total Rs. 8 reduction, Rs. 4.73 per unit, will be a permanent adjustment. This change results from the cancellation of agreements with six Independent Power Producers (IPPs), the revision of power purchase agreements (PPAs) for 16 IPPs to a take-and-pay model, the delinking of bagasse power plants from the US dollar to the Pakistani rupee, and a reduction in the Return on Equity (RoE) for government power plants (GPPs) to 13 percent, based on the Pakistani rupee, with the US dollar fixed at Rs. 168.

Officials also noted that the tariff reduction will account for the impact of not lowering petroleum product prices, which have decreased in the international market since March 16, 2025. The estimated financial impact of maintaining the current petroleum prices is around Rs. 168 billion, which will contribute to a Rs. 1.30 per unit reduction in power tariffs.

The IMF has approved this relief for the government, acknowledging the decision to keep petroleum prices unchanged for three months, with potential impacts reaching up to Rs. 250 billion if international prices continue to fall. However, the Rs. 1.30 per unit relief will only last for one month.

Additionally, officials from the Finance and Power Divisions are exploring ways to further reduce the power tariff by an additional Rs. 2 per unit. They are considering various options, which will be finalized before the Prime Minister’s announcement on March 23. The government aims to make Rs. 6 of the Rs. 8 per unit reduction a permanent adjustment.

However, the government has decided to remove the Rs. 35 PTV fee from electricity bills, effective July 2025. In the upcoming budget for FY2026, the government plans to allocate funds to make the Pakistan Television Corporation (PTV) operational.