The federal government has introduced a revised plan to reduce the baseline electricity tariff by Rs8 to Rs10 per unit, as per the report on Friday, citing insider sources.
This initiative is designed to tackle the circular debt crisis by lowering debt repayments.
Under this plan, a Rs130 billion reduction in debt payments will create financial flexibility, with the saved funds being redirected to cut electricity prices.
The move is expected to reduce financial stress in the power sector and offer relief to consumers.
According to sources, an IMF review mission is scheduled to visit Pakistan at the beginning of next month, during which the government intends to present this proposal.
However, it is worth mentioning that the IMF had previously dismissed a proposal to lower taxes as a means to reduce electricity costs.
This new approach, however, proposes a direct cut in the basic tariff by Rs8 to Rs10 per unit.
In a separate development, thanks to fuel cost adjustments, electricity consumers of all power distribution companies (Discos) were set to receive a relief of up to Rs2 per unit in electricity rates in January 2025.
However, K-Electric (KE) consumers were excluded from this relief, as revealed on Thursday.
This adjustment comes in response to fluctuations in fuel prices used for power generation.
The Central Power Purchasing Agency Guarantee Limited (CPPA-G) formally requested a Rs2 per unit decrease for January 2025 under the Fuel Charges Adjustment (FCA) mechanism.
The National Electric Power Regulatory Authority (NEPRA) has scheduled a public hearing on February 27, 2025, to evaluate the proposal for Ex-WAPDA Distribution Companies (XWDISCOs).
According to CPPA-G, the actual fuel cost for January 2025 was lower than the reference cost, which justified the reduction in electricity charges.
The power generation during the month relied on a mix of hydropower, nuclear energy, and Re-Gasified Liquefied Natural Gas (RLNG), with smaller contributions from coal, furnace oil, and renewables.
In total, 7,816 GWh of electricity was supplied to Discos, with an average fuel cost of Rs11.008 per unit, which was Rs2 lower than the reference cost set earlier.
If approved, this rate cut is expected to provide much-needed relief to consumers facing rising electricity tariffs.
NEPRA will make a final decision following the public hearing, allowing stakeholders and consumers to voice their opinions and concerns before the implementation of the revised rates.
