Islamabad, February 21, 2025: The federal government has devised a new plan to reduce the baseline electricity tariff by Rs8 to Rs10 per unit while tackling the country’s mounting circular debt, sources revealed on Friday. The proposal comes after the International Monetary Fund (IMF) rejected an earlier strategy to lower tariffs through tax cuts.
According to sources, the revised plan will be presented to the IMF during its upcoming visit to Pakistan next month. The government aims to curtail circular debt by up to Rs1.3 trillion, alleviating financial losses in the power sector.
The IMF review mission is scheduled to arrive at the beginning of next month, with discussions on the new strategy expected to be a key agenda item. Previously, the IMF dismissed a proposal to reduce electricity rates by cutting taxes.
Last year, the government had announced plans to lower power tariffs by Rs12 per unit by March 2025 through agreements with private Independent Power Producers (IPPs), government-owned power plants, and renewable energy sources such as wind and solar.
