Electricity Prices to Drop by Rs 6 per Unit: Govt’s New Plan

n a bid to provide relief to consumers, the federal government has devised a plan to reduce electricity prices by Rs 6 per unit and has shared it with the International Monetary Fund (IMF). Although the IMF has not yet endorsed the plan, it has sought additional details.

According to sources within the Power Division, the federal and provincial governments will collectively arrange funding of Rs 2,800 billion to implement the plan. The federal government will bear Rs 1,400 billion of the cost, while the remaining Rs 1,400 billion will be deducted from the provincial governments’ share under the National Finance Commission (NFC) award. The breakdown of the provincial share is as follows: Punjab (Rs 699 billion), Sindh (Rs 351 billion), and Khyber Pakhtunkhwa (Rs 231 billion).

The plan aims to close down inefficient power plants by paying off Rs 2,800 billion, terminate or renegotiate contracts with Independent Power Producers (IPPs), and repay local loans. By reducing the profit margins of government-owned power plants, electricity prices will decrease by Rs 1.15 per unit. Additionally, eliminating the circular debt of Rs 2,300 billion will further reduce prices by Rs 2.83 per unit.

If implemented, this plan could bring significant relief to consumers struggling with high electricity costs.”