Electricity prices likely to drop by Rs8 per unit from next month

Prime Minister Shehbaz Sharif is expected to announce a reduction of Rs8 per unit in electricity prices on March 23, following approval from the International Monetary Fund (IMF), sources revealed.

Officials from the Finance Ministry and the Power Division are also evaluating an additional reduction of Rs2 per unit, with a final decision expected before the official announcement.

The revised electricity tariffs will take effect from April 1, 2025, with consumers seeing the impact on their bills starting in May.

According to sources, Rs4.73 per unit of the total reduction will be a permanent adjustment. This adjustment stems from several key policy changes, including the cancellation of contracts with six Independent Power Producers (IPPs), a shift to a "take and pay" model for power purchase agreements with 16 IPPs, and the transition of Bagasse power plants from US dollar-based pricing to Pakistani rupees.

Additionally, the return on equity (ROE) for government power plants (GPPs) has been reduced by 13%, with the dollar rate fixed at Rs168.

Read more: Electricity prices likely to drop next month 

Officials also noted that the reduction takes into account falling global oil prices, which saw a decline from March 16, 2025