Prime Minister Shehbaz Sharif has announced a decrease of Rs7.41 in electricity prices for residential consumers after receiving approval from the International Monetary Fund (IMF) to reduce tariff differentials.

The Prime Minister stated that electricity rates for industrial consumers will see a reduction of Rs7.59.

Prime Minister Shehbaz is currently addressing an event regarding the government’s new electricity package, designed to offer consumers lower-cost power.

He described the decrease in electricity prices as an “Eid al-Fitr gift,” stating that the Chief of Army Staff General Syed Asim Munir played a key role in it.

The Prime Minister noted that these reforms are part of a promise for Pakistan’s economic development made by the leader of the Pakistan Muslim League-N (PML-N) leader Nawaz Sharif.

He acknowledged that when his government took office, Pakistan was on the brink of default, causing widespread fear among business people.

“Efforts to save Pakistan from default were met with sabotage, as letters were sent to the IMF,” he stated.

“Inflation has come down to single digits, dropping from 38% to 1.5%,” he said.

“Interest rate has decreased from 22.5% to 12%, and petrol prices have been reduced by up to Rs38, making them among the lowest in the region.”

He continued by stating that efforts to save Pakistan from default were undermined, the sacrifices of the nation and the business community helped avert disaster.

“To strengthen the economy, structural reforms will be necessary,” he said.

“The IMF initially rejected the idea of reducing electricity prices, but we [Shehbaz and his government] argued that relief should come from lowering electricity costs instead of petrol prices.”

He also pointed out that shopkeepers, investors, and industrialists were being forced to shut down their businesses due to the high cost of goods, leading to a significant decline in industrial activity.

He reflected on the hardships faced by the Pakistani people, including times when pensioners struggled to pay their electricity bills while worrying about their children’s medical needs.

He condemned those who had breached agreements with the IMF, jeopardising the country’s interests for their political motives.

He acknowledged that without significant reductions in electricity prices, economic growth in the country’s industry, trade, and agriculture will be hindered.

The Prime Minister emphasised the necessity of implementing reforms such as privatization and right-sizing due to IMF constraints on subsidies.

He highlighted the annual loss of Rs800 billion incurred from the IMF loan, stressing the need for collective action from all politicians and institutions to address this issue.

“The government plans to increase revenues by 35%, which is crucial for reducing debt and securing additional loans.”

Negotiations with IPPs

The Prime Minister praised his team’s successful negotiations with Independent Power Producers (IPPs), resulting in savings of 3,696 billion rupees and ensuring that the public benefits from these efforts.

Shehbaz also announced that a permanent solution has been developed for a circular debt of Rs2,393 billion. “This debt will no longer circulate — it will be completely eliminated,” he stated, adding that it will be fully eradicated within the next five years.

Khawaja Asif’s remarks

Earlier, Defence Minister Khawaja Asif mentioned that the Prime Minister would speak to the nation today to share “good news.”

He noted that this address reflects efforts made since 2022, emphasizing that the PML-N and the coalition government prioritize national service, and the path toward development and economic recovery will continue.

Read more

Will electricity bills decrease after termination of IPP contracts?

Govt expects tariff relief following review of independent power producers

Major breakthrough as four IPPs agree to terminate contracts early