A Major Relief Package Aimed at Easing Burden on Citizens
ISLAMABAD, April 2, 2025 – Prime Minister Shehbaz Sharif has announced a significant reduction of Rs7.41 per unit in electricity tariffs for consumers across Pakistan, bringing much-needed relief to households grappling with high electricity bills.
Speaking at an event in Islamabad, the premier acknowledged the challenges in securing this decision, emphasizing that it was not easy to convince the International Monetary Fund (IMF) of the tariff reduction. However, he credited his team for their persistent efforts in achieving this milestone.
For industrial consumers, the prime minister declared an even greater cut, reducing electricity rates by Rs7.59 per unit, a move aimed at supporting economic growth and industrial expansion.
Addressing Structural Reforms in the Power Sector
Shehbaz Sharif stressed the importance of structural reforms in Pakistan’s energy sector, highlighting the urgency to tackle power theft, which costs the country approximately Rs600 billion annually.
"While work has already begun to curb malpractices, we need to completely eradicate them," he said. "If one shopkeeper pays electricity bills honestly and another does not, it creates unfair competition."
Government’s Commitment to Economic Stability
A day before the announcement, the government hinted at “great news for the entire nation” through its official social media platforms, using the hashtag ‘Small Eid, Big Gift’, indicating the relief package was timed as an Eid-ul-Fitr present.
Although an Rs8 per unit tariff reduction had been anticipated on March 23, the announcement was delayed due to last-minute negotiations with the IMF. However, PM Shehbaz had assured the public that a relief package would be introduced soon.
Additionally, the government decided to maintain existing petroleum prices, despite initial plans to reduce them by up to Rs13 per liter, instead opting to shift the financial impact to electricity consumers.
Reactions from Political Leaders and Economic Experts
Prominent government figures welcomed the initiative, calling it a crucial step toward economic stability and growth.
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Rana Sanaullah, the prime minister’s aide, remarked that the relief package would “thwart Pakistan’s default plot,” predicting a positive impact on the stock market, remittances, and inflation.
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Defence Minister Khawaja Asif also expressed optimism, stating, “This is the result of Allah’s grace and the government’s hard work since 2022. Our journey towards progress and economic revival will continue.”
IMF’s Role in the Tariff Reduction
Pakistan recently secured a $1.3 billion agreement with the IMF, following the successful first review of the ongoing 37-month bailout program. The IMF initially permitted a Re1 per unit reduction in tariffs but later approved broader relief measures.
According to IMF Resident Representative Mahir Binici, the program allows for a tariff differential subsidy, and revenue from captive power plants (CPPs) can be utilized to lower electricity prices by Rs1 per kilowatt-hour.
“This reduction will benefit all consumers,” he stated.
A Gift to the Nation
Describing the electricity tariff cut as an Eid gift, Prime Minister Shehbaz Sharif reaffirmed his commitment to reviving industries, supporting agriculture, and boosting exports. He expressed confidence that the Pakistani economy is on the path to recovery, with further initiatives planned to reduce inflation and improve financial stability.
As Pakistan moves forward with these economic reforms, consumers and businesses alike are hopeful that the relief package will provide tangible benefits in the coming months.
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