Islamabad has unveiled a revised strategy to reduce electricity tariffs by cutting the base rate by Rs 8 to 10 per unit and addressing the circular debt burden. This move comes after the International Monetary Fund (IMF) rejected a previous proposal aimed at lowering electricity rates through tax reductions.
The newly devised plan aims to utilize financial leeway created by a Rs 1.3 trillion reduction in loan repayments to tackle ongoing financial losses in the power sector. A senior government official confirmed that a significant portion of this financial relief, approximately Rs 1 trillion, will be allocated towards eliminating the accumulated circular debt.
The official further disclosed that an IMF review mission is scheduled to visit Islamabad from March 4, 2025, to negotiate the first review under the Extended Fund Facility (EFF) valued at $7 billion.
This development is part of broader efforts by the government to address fiscal challenges and improve the economic stability of the nation. The focus on reducing power tariffs is seen as a critical step in alleviating the financial strain on consumers and the energy sector, while also seeking to meet international financial obligations.
