Govt Claims Cut in Electricity Prices up to Rs 11 Per unit

As the year ends the Minister for Power, Sardar Awais Ahmed Khan Leghari claimed on Saturday that electricity rates had come down up to RS 11 per unit during last nine months.

He presented the key achievements and ongoing initiatives of the incumbent government related the country’s power sector.

In a news conference held here Saturday the minister informed the electricity distribution-side reforms, “The government is moving towards privatisation and concession models, preceded by the hiring of independent Boards of Directors for distribution companies.”CM launches free solar panel scheme

Regarding Independent Power Producers (IPPs), the Minister revealed that the agreements with five IPPs have been terminated in the first phase, achieving national savings of Rs411 billion and annual savings of Rs70 bn.

“In the second phase, agreements with eight bagasse-based IPPs have been settled, resulting in annual savings of Rs8.826 billion and national saving of Rs238.22 bn, while negotiation with 16 other IPPs was underway, that will result in saving of Rs481 bn.

The Minister stated, “The power sector has shown marked improvement in electricity prices and the average price of electricity has decreased to Rs44.04 per unit from Rs48.70 per unit in June 2024, marking a reduction of Rs4.66.”

He added that the industrial electricity prices have also seen a significant drop to Rs47.17 per unit, down from Rs58.50 per unit in June 2024, reflecting a reduction of Rs11.33.

Mr Leghari added that the circular debt costs were being shifted from electricity bills to the national debt to reduce burden on the consumer.
He added that through innovative policies, substantial investments, and bold reforms, significant progress has been made towards ensuring energy sustainability, reducing electricity costs, and driving economic growth.

The Minister presented a detailed overview of reforms undertaken in the last nine months.
“We have eliminated Rs150 billion in cross-subsidies from the industrial sector, a step that has boosted industrial growth and job creation in Pakistan,” he highlighted.
Mr Leghari emphasised that the government was diligently working on upgrading the transmission sector, including the trifurcation of NTDC into three entities.
These three entities will be the ‘National Grid Company of Pakistan’ being established for efficient and reliable transmission, the ‘Energy Infrastructure Development and Management Company’ for project management, and the ‘Independent System and Market Operator’ for a competitive and transparent electricity market.
He highlighted about the solarisation of agricultural tube wells in Balochistan.
“We are solarising 27,000 tube wells at a cost of Rs55 billion, with a 70 percent federal government contribution.”
The minister boasted that this initiative will promote green energy and revolutionise the agriculture sector in Balochistan.
He acknowledged the challenges faced by the power sector, including transmission constraints and poor recovery rates, which contribute to Rs250 billion in losses caused by DISCO inefficiencies.
“Efforts to manage the Rs2.2 trillion circular debt burden were ongoing, with a focus on reducing consumer electricity costs, we are also addressing the impact of dollar-denominated debt as it has exacerbated by depreciation of rupee,” he said.
The Minister elaborated on the Bijli Sahulat Package, saying that this package introduces a special tariff of Rs26.07 per unit for households and industries.
Under this package the domestic consumers will benefit from savings between Rs11.42 to Rs26.00 per unit, while commercial consumers can expect savings of Rs13.46 to Rs22.71 per unit.
“The industrial users will enjoy savings ranging from Rs5.72 to Rs15.05 per unit, and this initiative underscores our commitment to reducing electricity costs and supporting economic growth.” Mr Leghrai added.
However he did not further elaborate about the package, and made a futuristic announcement that the government’s plan to introduce special tariffs for electric vehicles (EVs) under a forthcoming EV policy.
“This policy will reduce dependency on imported fuels, lower greenhouse gas emissions, and improve air quality,” minister said, adding that it will also foster economic growth through job creation in local manufacturing and the development of charging infrastructure.
He claimed that the new EV policy will revolutionise the transport sector of Pakistan.
The Minister asserted that the reforms and achievements will address long-standing challenges in the power sector, and with increased economic activity, enhanced employment rates, and lower electricity costs on the horizon, the future of Pakistan looks promising.