Prime Minister Shehbaz Sharif on Thursday made a massive announcement of a decrease of Rs 7.41 per unit in the tariffs for electricity consumers across Pakistan, providing what came as a huge relief amid skyrocketing power bills. At a public gathering in Islamabad, the prime minister spoke and conveyed the message that it had been a difficult negotiation with the International Monetary Fund (IMF) and congratulated the people.
For the industrial consumers, the relief will be even more, with the rates lowered by Rs 7.69 per unit. PM Shehbaz reiterated the need for structural reforms in the power industry, as well as addressing the staggering problem of electricity theft worth an estimated Rs 600 billion a year.
The reduction in electricity prices by 15% or Rs 7.41 per unit will benefit the 35 million residential users. The government explained that the price cut consists of several components:
- Quarterly tariff adjustment: Rs 3.40 per unit reduction
- Monthly fuel cost adjustment: Less than Rs 1 per unit reduction
- Increased subsidy: Rs 1.71 per unit increase
He emphasized that genuine electricity payers will not be punished while others default on payments. “If the shopkeeper pays his bill honestly but the one beside him doesn’t, that’s unfair competition,” he added.
The prime minister elaborated further that the government would privatize or commercialize the inefficient power distribution companies (DISCOs) in a bid to minimize the financial loses. According to him, an open market system would contribute further decreases in the prices of electricity.
He commended the government team that labored tirelessly to complete the power reforms and gave credit for persuading the IMF to accept the cut in tariffs. He remarked that rather than transmitting the lower prices of petroleum to consumers, the government kept the savings in a bid to bargain for tariffs relief.
Shehbaz Sharif highlighted a successful renegotiation with the Independent Power Producers (IPPs) resulting in the government saving Rs 3,696 billion. He admitted the persistent problem of circular debt, which still stands at the level of Rs 2,393 billion. The government pledged that they would resolve the issue over the next five years.
How much will you save on your April electricity bill?
Domestic consumers savings (April bill)
| Usage | Old Rate (Rs) | New Rate (Rs) | Savings (Rs) |
|---|---|---|---|
| 200 Units | Rs 9,740 | Rs 7,528 | Rs 2,212 |
| 300 Units | Rs 14,610 | Rs 11,292 | Rs 3,318 |
| 500 Units | Rs 24,350 | Rs 18,820 | Rs 5,530 |
Industrial consumers savings (April bill)
| Usage | Old Rate (Rs) | New Rate (Rs) | Savings (Rs) |
|---|---|---|---|
| 1,000 Units | Rs 58,500 | Rs 40,510 | Rs 17,990 |
| 3,000 Units | Rs 175,500 | Rs 121,530 | Rs 53,970 |
Special consumer price reductions
| Consumer Type | Old Price (Rs) | New Price (Rs) | Price Cut (Rs) | % Reduction |
|---|---|---|---|---|
| Lifeline (Up to 100 Units) | Rs 14.66 | Rs 8.52 | Rs 6.14 | 32% |
| Protected (Up to 200 Units) | Rs 17.65 | Rs 11.51 | Rs 6.14 | 35% |
| Up to 300 Units | Rs 41.14 | Rs 34.00 | Rs 7.14 | 17% |
| Over 300 Units | Rs 55.70 | Rs 48.46 | Rs 7.24 | 13% |
It is important to note that these rates are for base tariffs and do not include additional charges such as taxes, including Power Duty, GST, PTV License Fee, Fuel Price Adjustment, and other surcharges, which will still apply to the final bill.