PM Shehbaz announces Rs 7.41 per unit reduction in electricity prices

Prime Minister Shehbaz Sharif announced a reduction in electricity prices for domestic consumers by Rs 7.41 per unit while addressing a ceremony in Islamabad on Thursday.

Prime Minister Shehbaz Sharif praised Army Chief General Asim Munir for his significant contribution to the government’s efforts in reviving Pakistan’s struggling economy, which was on the brink of default.

Shehbaz Sharif stated that in June 2024, the price of electricity for domestic consumers was Rs 48.70 per unit, which had already been reduced to Rs 45.50 per unit. Now, with an additional reduction of Rs 7.41 per unit, the new electricity tariff for domestic consumers will be Rs 34 per unit.

He also noted that in previous months, electricity rates had reached Rs. 58.50 per unit but had since dropped to Rs 47.19. With a further reduction of Rs. 7.59 per unit, the government aims to ease the financial burden on households.

Addressing a ceremony to announce a reduction in electricity prices, PM Shehbaz emphasised the resilience of the nation and the business community, saying, "This economy has moved from the darkest days of the past to the light, and for this, I commend the patience of the entire nation, especially the common man."

He went on to highlight the full support he had received from Army Chief General Asim Munir throughout the process, acknowledging his key role in the country’s economic recovery.

Regarding Independent Power Producers (IPPs), he acknowledged their initial contributions but pointed out their excessive profits. During negotiations, the government urged IPPs to pass on some benefits to the public. As a result, his team secured a significant agreement, preventing payments of Rs. 3,696 billion over the next 15 years.

Shehbaz Sharif highlighted that Pakistan’s circular debt, which stood at Rs. 2,393 billion, has now been "permanently managed" and is expected to be eliminated within five years.

The prime minister also underscored recent economic improvements, stating that interest rates had dropped from 22.5% to 12%, leading to business revival. Inflation, which was at 38%, has now fallen to single digits.

Read: Reducing Healthcare Burden Through Tobacco Harm Reduction: A Sustainable Solution for Pakistan

He stressed the need for structural reforms, including privatisation and "right-sizing," acknowledging that subsidies cannot be provided without IMF approval. He noted that Pakistan loses Rs 800 billion annually due to IMF debt, urging political leaders and institutions to work towards revenue generation.

Shehbaz Sharif announced plans to increase revenues by 35%, a figure lower than IMF targets but substantially higher than previous years. He asserted that achieving this target would reduce Pakistan’s debt burden and improve access to loans.