Electricity tariff cut on the horizon as contracts ended with five IPPs

Energy Minister Awais Leghari announced that the federal government aims to reduce electricity tariffs by up to Rs10 after terminating power purchase agreements with five independent power producers (IPPs). This move is expected to save the national exchequer Rs411 billion. Prime Minister Shehbaz Sharif stated that the IPPs have agreed to cancel their agreements voluntarily, saving the government Rs60 billion annually. High electricity costs have been a major issue, disproportionately affecting middle and lower-income segments of society. Renegotiating agreements with IPPs could significantly reduce tariffs, improve industrial competitiveness, and boost public trust in the government’s economic management. The establishment of an Independent System and Market Operator (ISMO) was also mentioned, which is expected to create a competitive environment for power generation and purchase. Overall, the government is taking steps to ease the burden on consumers and increase electricity usage in winter.