Islamabad: The International Monetary Fund (IMF) has approved a reduction of Rs 1 per unit in electricity tariffs, offering relief to consumers across Pakistan.
IMF officials confirmed that the tariff reduction will apply to all electricity users. The relief will be financed through revenue collected from the levy imposed on captive power plants using gas.
Part of IMF Bailout Agreement
The decision comes after a staff-level agreement (SLA) between the IMF and Pakistani authorities under the 37-month bailout programme. The deal, pending Executive Board approval, will grant Islamabad access to $1 billion under the Extended Fund Facility (EFF), bringing total disbursements to $2 billion.
Efforts to Maintain Fiscal Stability
The IMF clarified that the tariff cut aims to ease financial pressures while ensuring fiscal stability. The government is also preparing a broader relief package for electricity consumers, subject to the IMF’s approval.
Sources estimate that the Rs 1 per kilowatt reduction will provide relief worth Rs 100 billion. Households consuming 500 units per month will see a Rs 500 decrease in their electricity bills.
Power Minister Awais Leghari recently assured that the government remains committed to reducing power tariffs at the right time. He emphasized that Prime Minister Shehbaz Sharif would announce further relief measures soon.
Independent Power Producers’ (IPPs) Offer
Independent Power Producers (IPPs) have offered to cut tariffs by up to Rs 0.50 per unit and waive Rs11 billion in late payment surcharges. However, they have set a condition—the government must withdraw all legal proceedings related to alleged excessive profits.
Talks with More Power Producers Underway
The government is also negotiating with 75 additional power producers, including solar and wind energy firms. Talks with 29 IPPs have already been completed, which could save Rs3.498 trillion in future payments. These negotiations are expected to conclude by April or May, despite facing international resistance.
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