Prime Minister Shehbaz Sharif announced substantial reductions in electricity prices, up to Rs7.69 per unit, for consumers, promising further relief through structural reforms in the power sector.
Addressing a ceremony to unveil the package, the Prime Minister highlighted that the average per-unit price for domestic consumers has been reduced by Rs7.41 and for industrial consumers by Rs7.69. He stated that industrial electricity rates have been significantly lowered from Rs58.5 in June 2024.
The government aims to provide ongoing relief and foster national development through structural reforms, particularly within the power sector. These reductions are expected to boost industrial competitiveness by lowering production costs.
Prime Minister Sharif acknowledged the burden of high inflation and electricity bills on citizens, and assured that the government is committed to providing maximum relief. Key structural reforms include curbing an estimated Rs600 billion in annual power theft and establishing an open electricity market to further reduce tariffs. He also emphasized the need to privatize or commercialize Power Distribution Companies (DISCOs) to mitigate line losses and power theft, which strain the national treasury.
He praised the task force for its work on power reforms, noting their success in convincing the IMF to agree to tariff reductions, by retaining petroleum prices to use the profit to reduce electric bills. He also mentioned that the restoration of trust with the IMF, damaged in 2020, is now being achieved.
Furthermore, he commended the government’s negotiation with Independent Power Producers (IPPs), which resulted in savings of Rs3,696 billion. He also addressed the challenge of Rs2,393 billion in circular debt, outlining a five-year plan for its resolution.
The Prime Minister credited PML-N President Muhammad Nawaz Sharif and allied political party leadership for their support, and acknowledged the crucial support of Chief of Army Staff (COAS) Gen Asim Munir in stabilizing the economy.
He recalled the nation’s economic vulnerability when he assumed office, and stated that Pakistan’s economy is now stabilized and progressing towards sustainable growth. He pointed out the reduction of inflation, from 38% down to roughly 1.5% ahead of estimations. He also mentioned reduced petroleum prices, and a decreased policy rate.
He stressed the necessity of right-sizing and privatizing state-owned entities to address Rs800 billion in losses, and informed that this years tax collections are estimated to increase by 35%.
