Federal Government Plans to Reduce Electricity Prices Through Various Measures

Islamabad:The federal government has initiated planning to lower current electricity prices through a range of proposals and measures. Acknowledging the significant financial instability faced by the power sector, the government is exploring strategies to make electricity rates more reasonable. This includes potential reductions in development budgets at both federal and provincial levels.

In addition, the government is working on closing down certain domestic Independent Power Producers (IPPs), both public and private, as part of its broader power sector rationalization plan. However, this plan has yet to be approved by the International Monetary Fund (IMF).

Internal government sources have reported some resistance to the plan, with concerns that it may not be feasible and could fail to address the structural issues plaguing the loss-making power sector. High-level officials suggest targeting non-CPEC IPPs with various mechanisms to ensure capacity charges are met.

Furthermore, the government aims to create significant fiscal space by reducing allocations in the Public Sector Development Program (PSDP) at the federal level and in the Annual Development Programs (ADPs) of provincial governments. This strategy is intended to generate the necessary financial leeway to support the proposed measures.