ISLAMABAD: The federal government has submitted a detailed proposal to the International Monetary Fund (IMF) seeking approval for a Rs6 per unit reduction in electricity prices. This plan aims to alleviate the financial burden on consumers facing high electricity costs.
According to sources from the Power Division, the proposed plan involves a collaborative funding effort between the federal and provincial governments, totaling Rs2800 billion. The federal government is set to contribute Rs1400 billion, while the remaining amount will be sourced from the four provincial governments through the National Finance Commission (NFC) Award.
The provincial contributions are allocated as follows: Punjab is expected to provide Rs699 billion, Sindh Rs351 billion, Khyber Pakhtunkhwa Rs231 billion, and Balochistan Rs119 billion. These funds will primarily be utilized to close down inefficient power plants, settle outstanding contracts with independent power producers (IPPs), and repay local loans associated with certain power plants.
The plan includes provisions to either terminate or renegotiate contracts with IPPs, aiming to reduce their financial impact. Additionally, government-owned power plants will face reduced profit margins, potentially contributing to a Rs1.15 per unit decrease in electricity prices. Addressing the Rs2300 billion circular debt is also expected to lower prices by an additional Rs2.83 per unit.
The federal government is now awaiting IMF approval to move forward with the implementation of this plan, which is projected to provide substantial relief to consumers through reduced electricity costs nationwide.
