Federal Cabinet Approves Benefit of Petroleum Price Drop for Electricity Consumers

Islamabad:The federal cabinet has approved a decision to pass on the benefit of the reduction in global petroleum prices to electricity consumers. The approval was given during a cabinet meeting chaired by Prime Minister Shehbaz Sharif on Wednesday.

During the meeting, Prime Minister Shehbaz Sharif expressed satisfaction with the recent agreement with the International Monetary Fund (IMF) and the approval of a $1.3 billion funding arrangement. He highlighted that the IMF has shown confidence in Pakistan’s economy, and the first staff-level review of the $7 billion agreement with the IMF has been completed. The Prime Minister also stated that inflation in the country is at its lowest level, and improvements have been observed in the economy.

In addition to this, the cabinet granted approval for the transfer of the benefit from the reduction in petroleum product prices to electricity consumers. Furthermore, the cabinet approved the revision of contracts for the Bega’s power plants and gave in-principle approval for the Whistleblower Protection Act 2025.

The cabinet also approved amendments to Income Tax, Sales Tax, and Federal Excise Duty regulations in Islamabad. Moreover, the cabinet decided to reinstate income tax rebates for teachers and researchers.

The cabinet confirmed decisions taken by the Cabinet Committee on Privatization (on March 11) and the Economic Coordination Committee (on March 13 and 21). It was also decided to further consult on the Solar Net Metering Regulations and present recommendations to the cabinet afterward.

Earlier on Tuesday, in a press briefing after a ceremony in Islamabad, Federal Minister for Power, Owais Leghari, had stated that electricity prices would decrease, and the nation would soon hear good news from the Prime Minister.

It is noteworthy that after successful negotiations between Pakistan and the IMF, a staff-level agreement was finalized, which will provide Pakistan with $1 billion under the Extended Fund Facility (EFF) upon approval from the IMF’s Executive Board. Furthermore, Pakistan will receive $1.3 billion over a 28-month arrangement to address climate change and natural disasters. Under the program, the total loan amount will increase to $2 billion, with the EFF arrangement extending for 37 months.