Power consumers may get big relief under ‘winter package’

* Final approval of the package is contingent upon approval from IMF

Electricity prices likely to be reduced by up to Rs8 per unit for three months under the proposed winter package.

According to sources, the winter plan aims to offer relief to consumers by encouraging increased electricity consumption.

The Power Division, Ministry of Finance, and other departments are working together on the details of the winter package.

The winter package is expected to bring down electricity prices by up to Rs8 per unit for a three-month period. However, the final approval of the package is contingent upon approval from the International Monetary Fund (IMF).

Three different proposals are under consideration for the price reduction during the winter months.

One proposal suggests providing relief to all electricity consumers, while another suggests limiting relief to industrial consumers in order to boost consumption. In the case of relief being extended solely to industrial consumers, a price reduction of up to 20 rupees per unit is expected.

The first proposal recommends a 3-month period from December to February 2025 for the winter package. A second proposal considers extending the duration to December through April.

Sources also mentioned that the preference will be to grant relief to industrial consumers under the winter package. Officials from the Ministry of Finance have already engaged in discussions with the IMF regarding the package. A formal report has also been submitted to address questions raised by the IMF.

The final decision on the package, which involves reducing production costs and increasing electricity demand, is expected soon. Should the IMF approve, the proposal will be sent to the National Electric Power Regulatory Authority (NEPRA) for approval. Once NEPRA grants approval, the federal cabinet will issue the final approval for the winter package.

Earlier, the National Electric Power Regulatory Authority (NEPRA) jacked up electricity rates for Karachi by Rs0.40 per unit.

Separately, the International Monetary Fund (IMF) staff, led by Nathan Porter, will travel to Pakistan between November 11-15 for a staff visit to discuss recent developments and Extended Fund Facility (EFF) programme performance to date.

Top officials revealed that this mission is not part of the first review under the $7 billion EFF, which will be no earlier than the first quarter of 2025.

Sources said during the visit, the IMF staff would hold meeting with the finance minister, chairman Federal Board of Revenue (FBR), State Bank of Pakistan (SBP) and other concerned ministries including energy.

The IMF staff is expected to discuss the revenue shortfall and may ask the government for more measures to bridge the revenue gap. The government closed first quarter of current fiscal year 2024-25 with overall budget balance of Rs1.696 trillion equivalent to 1.4 percent of Gross Domestic Product (GDP).