Relief from Inflation! Lower Electricity Bills Expected from May
Prime Minister Shehbaz Sharif is set to make a major announcement on March 23 that will bring significant relief to the public! With the approval of the International Monetary Fund (IMF), the government has decided to reduce electricity prices by Rs. 8 per unit, which will take effect from April 1, 2025. Consumers will see the impact of this reduction in their May electricity bills.
According to media reports, Rs. 4.73 per unit will be permanently adjusted, thanks to key government decisions, including the cancellation of 6 Independent Power Producers (IPPs) contracts, modification of 16 IPPs’ agreements to a “Take and Pay” model, conversion of Bagasse power plants from US dollars to Pakistani rupees, and fixing the Return on Equity (RoE) for Government Power Plants (GPPs) at 13% with the US dollar pegged at Rs. 168.
The government has also accounted for the effect of petroleum prices, which were reduced in the international market on March 16, 2025. As a result, Rs. 1.30 per unit relief will be available for one month only. However, if global fuel prices drop further, this financial impact could reach Rs. 250 billion. Additionally, authorities are considering a further Rs. 2 per unit reduction, which will be finalized before the March 23 announcement.
In another major development, the government has decided to remove the Rs. 35 PTV fee from electricity bills starting in July 2025. Instead, funds will be allocated for PTV’s operations in the 2026 fiscal budget, ensuring that consumers are not burdened.
These measures will provide much-needed relief to consumers struggling with high electricity costs. The government aims to implement Rs. 6 out of the Rs. 8 per unit reduction as a permanent adjustment, ensuring long-term stability in power tariffs.
