The government is poised to announce a substantial decrease in electricity tariffs, aiming to provide much-needed relief to consumers across Pakistan.

Power Distribution Companies (Discos) have submitted petitions seeking a negative adjustment totaling approximately Rs52.123 billion (around Rs 2 per unit) for the second quarter of FY 2024-25 under the Quarterly Tariff Adjustment (QTA) mechanism.

If approved, this adjustment could lower electricity prices for millions of consumers starting in March 2025. A public hearing by the National Electric Power Regulatory Authority (Nepra) is scheduled for February 12, 2025, to discuss these petitions.

The requested adjustments primarily stem from changes in exchange rates and a reduction in interest rates. In addition, Prime Minister Shehbaz Sharif is expected to announce an additional reduction of Rs7 per unit, especially benefiting the industrial sector, starting in April 2025. This could lead to an overall cut of approximately Rs 9-10 per unit from April onward.

Government officials highlight that the renegotiation of power purchase agreements with Independent Power Producers (IPPs) is anticipated to yield annual savings of Rs137 billion, contributing to a broader goal of reducing energy costs by Rs1.14 trillion.

The Federal Cabinet has already approved new contracts aimed at achieving these savings. This move is seen as a pivotal step towards alleviating the financial burden on consumers while improving the overall energy landscape in the country.