Govt to cut electricity prices by Rs 6-8 per unit in two months

The federal government is set to reduce electricity prices by Rs6-8 per unit within the next two months, officials from the Power Division confirmed on Monday.

This initiative aims to ease the financial burden on consumers, particularly affecting middle- and lower-income households, and address growing public discontent over high tariffs.

Opposition parties have sharply criticized the current energy sector policies and agreements with independent power producers (IPPs).

Federal Secretary Energy (Power Division) Dr. Muhammad Fakhr-e-Alam Irfan informed the Senate Standing Committee on Power that efforts to cut taxes on electricity bills are underway, pending approval from the International Monetary Fund (IMF), with talks expected in early March.

Officials added that negotiations with IPPs have saved the government Rs700 billion, including Rs300 billion in interest payments, by terminating deals with six IPPs and finalizing a "take-and-pay" model with 25 others.

Additionally, a task force is working with state-owned power plants to streamline operations and further reduce costs.

To address the Rs2.3 trillion circular debt in the power sector, the government is also in discussions with banks to secure a Rs1.24 trillion fixed-rate loan. Meanwhile, the State Bank of Pakistan has lowered its policy rate from 22% to 12%, with further cuts anticipated.