Prime Minister Shehbaz Sharif has announced a significant reduction in electricity tariffs, providing much-needed relief to both domestic and industrial consumers across Pakistan. Effective immediately, domestic electricity rates have been decreased by Rs7.41 per kilowatt-hour, bringing the average cost down to Rs34.47 per unit. Industrial consumers will benefit from a reduction of Rs7.59 per kilowatt-hour, lowering their average rate to Rs40.60 per unit.

This initiative is part of the government’s broader strategy to stimulate economic growth and alleviate financial pressures on citizens. The tariff reductions are made possible through comprehensive power sector reforms and the successful negotiation of a $7 billion bailout package from the International Monetary Fund (IMF). Prime Minister Sharif acknowledged the challenges in persuading the IMF to agree to these cuts amidst ongoing fiscal consolidation efforts.

In addition to lowering electricity costs, the government plans to reinvest savings from declining global oil prices into the power sector. This reinvestment aims to further enhance the efficiency and sustainability of Pakistan’s energy infrastructure. These measures coincide with a notable decrease in inflation, which peaked at 38.5% in May 2023 and has now fallen to under 10%. Furthermore, interest rates have been reduced by nearly 10 percentage points over the past year, fostering a more favorable environment for business expansion within the country’s $350 billion economy.

The government’s commitment to addressing the longstanding issue of circular debt, which stands at approximately Rs2,393 billion, is also evident. A comprehensive plan has been devised to resolve this challenge over the next five years, ensuring the financial stability of the power sector.

Prime Minister Shehbaz Sharif expressed gratitude to Chief of Army Staff General Asim Munir and his colleagues for their unwavering support in achieving economic stability. He also commended the task force responsible for implementing power sector reforms, highlighting their dedication and innovative approaches in negotiating favorable terms with the IMF and Independent Power Producers (IPPs).

These developments reflect the government’s proactive approach to economic reform and its commitment to providing tangible relief to the people of Pakistan.