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The federal government is likely to slash electricity prices by Rs6-8 per unit within the next two months, Power Division officials said on Monday.
The high cost of electricity has become a contentious political issue, with opposition parties leveraging public dissatisfaction to criticise the incumbent government’s handling of the energy sector and agreements with independent power producers (IPPs).
The burden of high electricity tariffs falls disproportionately on the middle and lower-income segments of society, fueling public outrage and eroding trust in the government’s ability to manage the economy.
Federal Secretary Energy (Power Division) Dr Muhammad Fakhr-e-Alam Irfan on Monday told the Senate Standing Committee on Power that the government was working on reducing taxes on electricity bills but noted that any such move would require approval from the International Monetary Fund (IMF).
“Talks with the IMF on this matter are expected to take place in the first or second week of March,” he added.
The Power Division officials further said that as part of cost-cutting measures, negotiations with IPPs saved the government Rs700 billion, including removing Rs300 billion in interest payments.
“So far, agreements with six IPPs have been terminated, while discussions with 25 others on a “take-and-pay” model have been completed,” they added.
Stressing that the government’s ultimate goal was to bring the circular debt to zero as soon as possible, the officials said that authorities were also in talks with a task force overseeing state-owned power plants to streamline operations and further reduce costs.
