Prime Minister Shehbaz Sharif on Thursday announced long-promised reductions to electricity prices, adding that more relief will follow as the government strengthens the economy.
In a special event attended by members of the federal cabinet, leading businessmen and journalists, the prime minister announced that domestic consumers would see their electricity prices decline by Rs. 7.41/unit, reducing the price to Rs. 34/unit. For industrial consumers, he said, prices will decline by Rs. 7.59/unit.
Last month, following approval from the International Monetary Fund (IMF), the government had requested the National Electric Power Regulatory Authority (NEPRA) to reduce electricity prices by Rs. 1/kWh. Separately, the government had defended a decision to maintain fuel prices amidst a global price drop by claiming the benefit would be passed onto consumers in the form of cheaper electricity. The announcement was initially slated for March 23, but was delayed due to some pending issues with the IMF.
In his speech on Thursday, the prime minister stressed on the need to learn from past mistakes as the country moved forward. He said the incumbent government had faced numerous obstacles, but worked tirelessly to prevent Pakistan from defaulting. “When we took office, the country was on the brink of default, and the IMF was unwilling to negotiate,” he said, adding the recovery of the past year had enabled the fulfilment of the party’s election manifesto.
However, he said, the path to recovery had faced several hurdles. Nonetheless, he noted, Pakistan continued to have the lowest petroleum prices in the region, had seen its interest rates drop from 22% to 12% and had seen inflation decline from 38% to the single digits.
Emphasizing the need for structural reforms to proceed toward economic growth, Sharif said he would soon meet industrialists to seek their input for further recovery. “Economic stability has been achieved, and now it’s time for Pakistan to rise,” he said, while stressing that no subsidies will be granted so long as the country remains under the IMF program. He also vowed to ensure that annual losses of Rs. 600 billion through power theft were eradicated.
Linking economic growth to electricity prices, the premier admitted it was not possible to achieve progress in industry, trade, and agriculture without lowering power costs. “The IMF initially refused to allow a reduction in electricity prices, but we insisted that instead of lowering petrol prices, relief should be provided through electricity,” he said, adding his government had engaged with independent power producers to secure this relief. “IPPs have made massive profits, and now it’s time for them to give back to the nation,” he said.
Sharif claimed that the government had devised a means to fully resolve the country’s circular debt of Rs. 2,393 billion within 5 years. “This debt will no longer keep circulating—it will be eliminated once and for all,” he vowed.
The prime minister also acknowledged the strong support of Chief of Army Staff Gen. Asim Munir and his team in stabilizing the economy.