Prime Minister Shehbaz Sharif on Thursday announced a Rs7.41 per unit cut in power rates across the country in a “major” relief package to reduce the burden on citizens facing exorbitant electricity bills.
Speaking at an event in Islamabad, the premier congratulated the nation and said that it was not easy to convince the International Monetary Fund (IMF) of the cut, adding that his team had gone to great lengths to achieve the feat.
For industries, he declared that electricity prices would be cut by Rs7.69. The premier also emphasised that the government would have to take up structural reforms in the power sector, highlighting his determination to tackle the theft of Rs600 billion. “Even though work on it has already started, we have to completely eradicate [malpractices]”, he said. “If a shopkeeper is paying the electricity bill honestly and the shopkeeper next to him does not, then it is an unhealthy competition.”
Highlighting the structural reforms to be taken in the power sector, the prime minister said the government would ensure halting power theft which was around Rs600 billion per year. Similarly, he said by establishing an open market, electricity tariffs would be further decreased.
He said there was no option but to privatise or commercialise power distribution companies (DISCOs) to reduce the burden of line losses and power theft on the national exchequer.
“I have directed the team concerned to work diligently to implement reforms in the sector as soon as possible,” he added.
Appreciating the task force formed to finalise power reforms, the prime minister said the force worked really hard and through their innovative thoughts, they brought different options and managed to convince the IMF to reduce the power tariffs.
“We did not pass on the low international petroleum prices and retained the prices to ensure that the government will reduce the power tariffs to which IMF agreed in principle,” he added. He said the trust with the IMF that was breached in 2020, was now being restored.
Similarly, he said the government successfully negotiated with independent power producers (IPPs), and praised the government team for their commendable efforts.
“After negotiation with the IPPs, our team managed to save Rs3,696bn that were to be paid to the IPPs,” he added.
Likewise, he added that the government was also facing an immense challenge of circular debts of Rs2,393bn. PM Shehbaz said the government had also made arrangements to gradually but permanently solve this problem within five years.
Following Prime Minister Shehbaz Sharif’s announcement of a reduction in electricity tariffs, the National Electric Power Regulatory Authority (NEPRA) issued a notification confirming the price cut as part of the quarterly adjustment,as consumers set to receive a relief of up to Rs3.02 per unit.
The notification issued by NEPRA for the quarterly adjustment specifies that the price reduction will apply for the period from October to December 2024.
Separately, Prime Minister Shehbaz Sharif has expressed satisfaction over the further reduction in the inflation rate.
In a statement, he said rate of inflation witnessed zero-point seven percent during the last month, while it was at twenty-point seven percent in the same month last year.
Shehbaz Sharif said the inflation rate was recorded at the lowest level this year even during the month of Ramadan. He said that the reduction in the inflation rate is also having positive impact on the lives of the common man and country’s economy. The Prime Minister said that substantial reduction in the inflation rate is the proof of the right direction of government policies and its tireless efforts for public welfare. Shehbaz Sharif said the country has embarked on the path of development as government is working round the clock for public well-being.