News
January 10, 2025
Rs10-12 Per Unit Cut in Electricity Prices Expected
Islamabad: The federal government has expressed optimism about a reduction in electricity prices by Rs10-12 per unit amid ongoing talks with the International Monetary Fund (IMF) on captive power plants.
"The matter regarding the captive power plants is nearing resolution," Federal Minister for Energy (Power Division) Awais Leghari said while speaking at a session of the National Assembly's Standing Committee on Energy on Thursday.
The minister revealed plans to review eight bagasse-based power plants and an additional 16 plants.
He noted that these evaluations would be followed by an assessment of government-owned plants' return on equity. "By the end of this month, the issue of captive power plants will be resolved," he said adding, "The electricity prices for domestic consumers have already been reduced by Rs4 per unit."
The power minister expressed his desire to lower the overall electricity rate by Rs50 but also cited the complexities of achieving this goal.
Addressing concerns about K-Electric, Leghari criticized the power utility's demand for Rs500 billion in profits over the next 5-7 years, calling it unreasonable.
He stressed that such a profit margin would unfairly impact consumers in Khyber Pakhtunkhwa and other regions.
The statement comes amid Prime Minister Shehbaz Sharif-led government's repeated calls for the need to reduce the exuberant electricity prices.
Earlier this month, sources told Geo News that a tariff revision for eight bagasse-based power plants would save Rs238 billion, equal to an annual saving of Rs8.83 billion.
Additionally, the termination or modification of contracts with 16 more IPPs would result in a further gain of Rs481 billion. These savings will be passed on to consumers in the form of reduced electricity costs.
Apart from finalizing the terminating of contracts with five IPPs last year, the government, last month, also completed the negotiations with RFO-based plants under "take and pay" terms. – The News
Courtesy The News
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