PM unveils power tariff relief for three months

ISLAMABAD: Prime Minister Shehbaz Sharif on Friday unveiled a three-month electricity relief package for the winter season providing a relief of up to Rs26.7 per unit for domestic, Rs15.5 for industrial and Rs22.71 for commercial consumers.

The prime minister, addressing an event to commemorate the birth anniversary of Allama Muhammad Iqbal being celebrated on November 9 here, told the gathering of ministers, students and artists that the relief package would remain in force from December 2024 to February 2025.

“Under the package, the domestic consumers will get a relief of up to Rs26.7 per unit for their power consumption surpassing 200 units of the protected category. It will help them save Rs11.42 to Rs26 per unit in the three months of winter,” he said.

Similarly, the industrial sector will save 18-37 percent, or Rs5.27 to Rs15.5 per unit under the package to help boost industrial production, growth and livelihoods. The commercial consumers will be given a 34-47 percent saving, or Rs13.46 to Rs22.71 per unit subsidy in the package.

The ‘Bijli Sahulat Package,’ has been offered in a bid to boost winter energy use and stimulate economic activities.

Notably, there will be a cap on benefits, as the discounted rate will only apply to incremental usage up to 25pc above the benchmark. Any additional usage beyond that threshold will be billed at the normal rate, as per the government’s notification. This package will not apply to lifeline consumers.

A key feature of the package is a flat rate of Rs26.07 per unit for electricity consumed beyond each consumer’s historical usage benchmark will be charged. The benchmark will be determined by the consumption from the same month over the past three years — 2024, 2023, and 2022.

For example, if a consumer used 2,000 units in January 2024, 1,800 units in January 2023, and 1,600 units in January 2022, the benchmark would be calculated by taking 50 percent of the 2024 consumption (1,000 units), 30 percent of the 2023 consumption (540 units), and 20 percent of the 2022 consumption (320 units). This results in a benchmark of 1,860 units.

Consumers will now enjoy the reduced tariff for consumption up to 25 percent above this benchmark in January 2025— in this case, for an additional 465 units. Any consumption beyond that will be charged at standard rates.

The package aims to mitigate the significant drop in electricity demand during winter, which plummets from approximately 25,000 MW in the summer to just 8,000 MW at peak winter. This reduction in demand leads to higher capacity payments, pushing up consumer costs. Meanwhile, the demand for gas surges to 6.5 billion cubic feet in winter, and the government seeks to bridge the gap through gas load management or costly LNG imports.

By comparison, standard rates can range significantly higher across various consumer categories, with domestic users typically paying between Rs37.49 and Rs52.07 per unit. They could see reductions ranging from 30 to 50 percent for incremental electricity usage beyond the established benchmarks. For a household accustomed to paying Rs50 per unit, the new package could mean significant monthly savings during the winter months.

Industries consuming more electricity than their established benchmarks can save 18-37 percent on electricity costs, translating to enhanced economic productivity. Their current base tariff is Rs31.79 to Rs41.12 per unit.

For instance, a business currently paying Rs40 per unit for 100,000 units could see its average cost drop to Rs37.21 per unit if it consumes an additional 25,000 units at the new rate. Thus, achieving an average expense reduction of 7.5 percent.

Similarly, commercial establishments also will enjoy savings between 34 to 47 percent on incremental power consumption. Commercial consumers are currently paying base rate in the range of Rs39.53 to Rs48.78 per unit.

Shehbaz said the package would stimulate a quantum jump in the country’s economic progress by boosting agriculture, industrial productivity, business activity and exports.

He said that the commitments and vision of the current government were being translated into actions through the relief package that would become the harbinger of improved economic resilience.

Besides thanking the International Monetary Fund (IMF) for permitting the government to announce the package, he also commended the cabinet members and relevant senior officers for their efforts and teamwork in working out the relief package.

Coming to the Iqbal Day celebration, he motivated the youth and children to remain resolute in their ambition to achieve a glorious future for the nation.

Highlighting the government’s achievements on the economic front, the prime minister said that the foreign remittances in the first quarter of the current fiscal year were record high as the overseas Pakistanis had sent $8 billion in remittances to the country. The Pakistani diaspora were the real ambassadors of the country offshore protecting the national interests and prestige, he added. He paid tribute to Dr Allama Muhammad Iqbal for his revolutionary philosophy that motivated Muslims and non-Muslims all across the world. He also recited different verses of the poems of Allama Iqbal that advocated for reawakening the passion of leadership, integrity, commitment, determination, courage, hard work, empathy, self-confidence and compassion to emerge as a leading nation in the world.

The prime minister also highlighted the current government’s efforts in reviving the national economy as it was determined to provide the best education facilities to its youth in fields of AI, IT, vocational training, and emerging technologies that would help them regain the glorious status of the nation.

He mentioned that the economic situation was improving as the inflation rate was down to 6.7 percent from 32 percent, policy rate down to 15 percent, and expressed the hope that the indicators would boost investment, exports, development in agriculture, livelihoods and businesses.

A short documentary produced by the Ministry of Information and Broadcasting was played featuring the life and philosophy of Allama Iqbal. Renowned singer Shehzad Roy and Dr Masooma Awan sang the famous poems of Iqbal while the young singers Mahnoor Altaf and Ashir Sultan recited “Lab Pe Aati he Dua Ban Ke Tamanna Meri” - a famous hymn written by Allama Iqbal.

The prime minister duly acknowledged the performance of the young kids and appreciated them warmly for their commendable show.

Federal cabinet members Sardar Awais Ahmad Khan Leghari, Musadik Malik, Jam Kamal Khan, Khawaja Asif, Shaza Fatima Khawaja and other senior government officers also attended the event.

In his message on 147th birth anniversary of Dr Allama Muhammad Iqbal, the prime minister said: “On this auspicious occasion of Iqbal Day, I extend my heartfelt tribute to Dr Allama Muhammad Iqbal, the visionary poet-philosopher and a towering figure whose thoughts and writings have deeply influenced the course of our nation. Iqbal’s philosophy ignited the dream of a separate homeland for the Muslims of the subcontinent, leading to the creation of Pakistan. His teachings on self-reliance, self-awareness, and unity remain a source of inspiration for us to strive for progress and prosperity as a nation.

“Allama Iqbal’s poetry is not just a reflection of his time but a timeless call for action and introspection.”

He urged the youth to rise above mediocrity and achieve greatness through unwavering faith and hard work. “As we celebrate this day, let us commit ourselves to imbibing his vision and building a nation that reflects his ideals of justice, equality, and excellence.

“Let us embody his teachings and move forward with renewed hope and determination, the premier added.

Meanwhile, Pakistan and Abu Dhabi Ports Group signed four Memorandums of Understanding (MoUs) to enhance collaboration in multiple fields including rail, airport infrastructure and maritime shipping and logistics.

The MoUs were signed as a high-level delegation of UAE investors led by UAE Minister of State for Foreign Trade Dr Thani bin Ahmed Al Zeyoudi called on the prime minister here, according to a PM Office press release.

The prime minister witnessed the exchange of MoUs relating to the ministries of maritime affairs, aviation, railways and Federal Board of Revenue with the Abu Dhabi Ports Group.

As per MoUs, Pakistan and Abu Dhabi Ports Group will explore potential collaboration in Customs, rail, airport infrastructure and maritime shipping and logistics sectors.

The MoUs are aimed at improving digital customs controls, developing dedicated freight rail corridors, upgrading Pakistan’s maritime fleet and marine services, and Pakistan’s international airports.

In the meeting with the delegation, the prime minister expressed gratitude to UAE President Sheikh Mohamed bin Zayed and Prime Minister Mohammed bin Rashid Al Maktoum for their steadfast support to Pakistan.

He underlined that the fraternal Pakistan and UAE ties were rooted in shared history and culture.

The prime minister highlighted the comprehensive economic partnership between the two nations across sectors such as trade, energy, and investment, which had contributed to growth and prosperity in both countries.

He also highlighted that the visit demonstrated the commitment of the UAE government to further enhance its investment footprint in Pakistan. He underscored that the investments by the UAE would play a crucial role in boosting Pakistan’s economy.

Dr Thani bin Ahmed Al Zeyoudi thanked the prime minister for the warm welcome and hospitality. Showing his satisfaction at the existing investments of Abu Dhabi Ports Group in Pakistan, he expressed keen interest to further expand investment in Pakistan in shipping, ports efficiency enhancement, logistics and digitisation of customs.

The UAE delegation also included Chairman of Kaheel Group Sheikh Ahmed Dalmook Al Maktoum, Managing Director & Group Chief Executive Officer, Abu Dhabi Ports Group Capt Mohamed Al Shamisi, UAE Ambassador to Pakistan Hamad Obaid Ibrahim Salem Al-Zaabi and senior officials of the Abu Dhabi Ports Group.

The Pakistani delegation included Deputy Prime Minister and Foreign Minister Ishaq Dar, Defence Minister Khawaja Asif, Commerce Minister Jam Kamal Khan, Finance Minister Muhammad Aurangzeb, Minister for Maritime Affairs Qaiser Ahmed Sheikh, SAPM Tariq Fatemi and senior government officials.

Meanwhile, in a meeting with a five-member delegation of VEON Group led by Chairman Augie K Fabela here, Prime Minister Shehbaz highlighting the government’s efforts to promote the telecommunications sector, and reiterated his resolve to meet the target of $25 billion in IT exports in the next three years.

The prime minister said that the government was taking measures to introduce 5G internet service to provide fast and reliable internet connectivity even in remote areas. The 5G services would also help the government realise its vision of Digital Pakistan, he added.

The telecommunication sector had a significant role in promoting a cashless and digital economy, he said and lauded the services of VEON Group’s subsidiary Jazz in Pakistan’s telecommunications and financial technology sectors, according to a PM Office press release.

Shehbaz said that the government was willing to collaborate with VEON Group in IT, digitisation and artificial intelligence.

The members of the delegation appreciated the government’s efforts for economic stability and said that Pakistan had become an important investment destination for the IT and telecom sector. Minister of State for Information Technology and Telecommunications Shaza Fatima Khawaja, Minister of State for Finance and Revenue Ali Pervaiz Malik, Coordinator to PM Rana Ehsan Afzal and relevant senior officers attended the meeting.

Separately, Chief of the Air Staff Air Chief Marshal Zaheer Ahmed Baber Sidhu called on the prime minister.

In the meeting, they discussed the professional matters pertaining to the Pakistan Air Force, according to a PM Office press release.

Meanwhile, the prime minister congratulated the Pakistan cricket team for winning the second one-day international match against Australia.

“Congratulations on yet another exceptional game! We knew you had it in you! Proud of our cricket team on the impressive win against Australia,” the prime minister wrote on his X timeline. He lauded the efforts by Chairman of Pakistan Cricket Board Mohsin Naqvi and the entire team for their great efforts.

The prime minister also appreciated Captain Mohammad Rizwan for steering the team as well as grabbing six catches, Saim Ayub for scoring 82 runs and Haris Rauf for a “sensational” five-wicket haul. “Our team is in great spirits! Keep bringing laurels home,” he added.