Islamabad:
The government had to reduce the power rate to RS1.71 per unit for all consumers of electricity distribution companies (DISCO) and K-Electric (KE) for the next three months as part of a price aid plan likely to be announced after Eidul FITR, sources announced on Friday.
They said that the National Electric Power Regulatory Authority (NEPRA) had been set to allow the increase in the differential price grant (TDS) of RS1.71 for all consumers for the months of April, May and June. They added that the reduction would be part of the plan to reduce the power rate to Rs6 per unit.
The federal office at its meeting on March 26 approved the increase in TDS for all consumers, with the exception of national users of Lifeline, RS1,71 per kilowatt hour (KWH) for the April-June quarter for the current financial year, in accordance with efforts to reduce consumer prices and improve demand.
According to a request submitted by the federal government to NEPRA, the increase in TDS aimed at balancing the budgetary burden and maintaining the sustainability of the power sector. The NEPRA has planned a public hearing on the request on April 4.
In accordance with the determinations of the NEPRA of July 11 and 13, 2024 and notified by the federal government, the national average rate for the financial year 2024-25 amounted to Rs35.50 per unit. However, the government informed the national average rate of Rs32.99 per unit, while filling the gap by the TDS.
In addition, the government has maintained a uniform consumption rate for KE consumers by incorporating the TDS. The additional TDS per unit for all consumers of nightclubs and KE, with the exception of Domestic Lifeline, was estimated at RS1,71 / kWh for April-June 2025.
Once considered and approved by the NEPRA after the public hearing, a notification would be issued by the federal government to modify the existing rates notified on July 14, 2024 to the repair of subsidies, the sources said.
Minister of Finance
The government plans to reduce electricity costs as part of a wider plan to relieve manufacturers and increase exports, in a decision that comes shortly after concluding an agreement to unlock more money from the International Monetary Fund.
The government plans to make an announcement to reduce electricity prices, Federal Minister for Finance and Revenues told Bloomberg, Senator Muhammad Aurangzeb told Bloomberg in an interview with the Boao forum in China.
This supports other efforts to reduce financing costs and tax charges to help the manufacturing sector increase production and sales abroad, he said.
“Basically, the DNA of the economy must change to make it exported,” said Aurangzeb.
“On the energy side, we work under the direction of the Prime Minister to reduce the prices and the Prime Minister will make an announcement around this in the coming days.”
The government is currently establishing a budget that widens the tax base by including sectors such as real estate, retail and agriculture, said Aurangzeb.
This could allow managers to reduce the burden of the manufacturing sector, who paid taxes disproportionately high, he said.
The State Bank of Pakistan has already lowered its 12% key policy rate, compared to 22% last April, but unexpectedly this month has held its reference rate.
Aurangzeb said that even if the policy rates are in the central bank, he sees more space so that they would drop later this year.
“Given where the inflation of big titles is, where central inflation is, I expect that during this calendar year, we will see the rates drop,” he said.
In the fourth quarter, Pakistan plans to launch its first Chinese obligation labeled in Yuan in a range of $ 200 million at $ 250 million to finance climate -related projects, Aurangzeb said.
Although Pakistan is already largely liable to Chinese development banks for infrastructure projects, it is important that the country diversifies its funding bases beyond the United States, Europe and Islamic Sukuks, he said.
“It is time that we are now the second largest and deepest capital market in the world,” said Aurangzeb.
