The federal government is working on various options to reduce electricity tariffs, aiming to cut prices by up to Rs10 per unit.
According to the sources, the government’s first option involves negotiating with Independent Power Producers (IPPs) to pass on the benefits to the public.
By terminating agreements with five IPPs, the government is projected to save a total of Rs411 billion, with an annual saving of Rs70 billion.Play Video
Sources within the Ministry of Energy revealed that a tariff revision for eight bagasse-based power plants would save Rs238 billion, equating to an annual saving of Rs8.83 billion.
Additionally, the termination or modification of contracts with 16 more IPPs would result in a further benefit of Rs481 billion.
These savings will be passed on to consumers in the form of reduced electricity costs.
The sources further said that the federal government is also considering an extension of the Winter Electricity Relief Package, as well as proposals to reduce taxes on electricity bills.
The government currently generates over Rs800 billion annually from taxes levied on electricity bills.
The development comes as the Prime Minister Shehbaz Sharif-led government has time again stressed on reducing the exuberant electricity prices.
Apart from finalising 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.
