ISLAMABAD: The International Monetary Fund (IMF) has approved a reduction of Re1 per unit in electricity tariffs, offering relief to all consumers.
According to IMF officials, the tariff reduction will be applicable to all electricity users and will be financed through revenue collected from the levy on captive power plants using gas. This decision follows the staff-level agreement (SLA) reached between Pakistani authorities and the IMF during the first review of the 37-month bailout programme.
The deal, pending final approval from the IMF’s Executive Board, will enable Pakistan to access approximately $1 billion under the Extended Fund Facility (EFF), increasing total disbursements under the programme to $2 billion.
Regarding the power tariff cut, the IMF clarified that this measure aims to ease financial pressures while ensuring fiscal stability. Meanwhile, the government is working on a broader relief package for electricity consumers, which will be announced following the lender’s approval.
Sources indicate that reducing electricity prices by Re1 per kilowatt-hour (kWh) could lower the overall financial burden on consumers by approximately Rs100 billion. For an average household consuming 500 units per month, this translates into a Rs500 reduction in their electricity bill.
The IMF’s approval follows assurances from Power Minister Awais Leghari, who recently reaffirmed the government’s commitment to reducing power tariffs at the “right time.” He had also stated that Prime Minister Shehbaz Sharif would soon announce the relief measure officially.
Additionally, independent power producers (IPPs) have offered to cut electricity tariffs by up to Re0.50 per unit and waive Rs11 billion in late payment surcharges—but only if the government withdraws ongoing legal proceedings and investigations into alleged excessive profits.
The government is also in final-stage negotiations with 75 more power producers—mainly solar and wind energy projects—expected to conclude by April or May. This follows successful talks with 29 IPPs, which are projected to save Rs3.498 trillion in future payments, despite facing international resistance in some cases.
