Prime Minister Shehbaz Sharif on Sunday announced the government will soon unveil a comprehensive package to reduce electricity costs, stressing this will require ongoing reforms in the power sector.
Earlier, it was reported that the prime minister would announce a Rs. 8/unit reduction in electricity tariffs on March 23 upon approval from the International Monetary Fund (IMF). The reduction was set to take effect from April 1 and would have been reflected in consumer bills of May.
In a statement issued on March 15, the Prime Minister’s Office had defended the decision to not reduce petroleum prices in accordance with global trends as a means to secure a further cut to power bills. “A package is being prepared with a comprehensive and effective strategy for power tariff cut,” read the statement, adding that “a big relief package is ready for the consumers through the cushion arising out of changes in international oil prices and other measures.” Rather than reducing petroleum prices, the government actually increased the petroleum development levy by Rs. 10/liter.
However, the announcement for any reduction to power tariffs did not materialize.
Chairing a meeting of the Power Division in Islamabad, the prime minister also called for an accelerated privatization process for power distribution companies. He urged the resolution of legal and administrative hurdles affecting the liquidation of generation companies.
During the meeting, per a statement, he ordered enhanced coordination between the Power Division, Water Resources Division, and Petroleum Division to formulate a unified energy sector strategy. He also directed officials to dispel misconceptions about the government’s solar policy through factual communication, reaffirming that the promotion of renewable energy remains a priority.
The direction follows criticism over the confusion arising from the Economic Coordination Committee (ECC)’s approval of revisions to existing net metering regulations of rooftop solar setups. Under the new policy, the buyback rate has been slashed from Rs. 27 to Rs. 10/unit. Further, the ECC approved a proposal, subject to the ratification of the cabinet, to allow the National Electric Power Regulatory Authority (NEPRA) to revise this buyback rate periodically.
While the revised framework does not apply to existing net-metered consumers until the expiry of their existing contracts, it would go into effect for any new consumers.