By Ali Imran
ISLAMABAD: Pakistan will reduce electricity tariffs during the winter season to encourage consumption and alleviate the pressure on natural gas resources used for heating, according to the country’s Power Minister Awais Leghari.
Speaking to media, Leghari said the measure aims to provide relief to businesses and citizens who have faced rising electricity prices due to energy sector reforms urged by the International Monetary Fund (IMF).
The reduction in tariffs will also help utilities that typically scale back operations or even shut down during winter months due to a significant drop in demand, which can fall by as much as 60 percent from peak summer levels. “Reducing prices will increase demand, especially in winter when people use inefficient gas resources,” Leghari told Reuters in a telephone interview.
He confirmed that the pilot plan will be implemented starting this winter, with lower tariffs to be in effect from December 2024 through February 2025.
The IMF, which approved a $7 billion, 37-month loan for Pakistan in September, has not yet commented on the new plan.
Pakistan’s reliance on costly natural gas and wood for winter heating has strained household budgets.
Over the past three quarters, power consumption has declined by 8-10 percent annually. However, Leghari remains optimistic that the economic recovery will help make up for the decline, projecting a 2.8 percent annual growth in power demand over the next decade.
The tariff reduction is expected to cut electricity costs for industries by 7-8 percent at optimal levels, providing a boost to industrial growth.
The government is also working to rationalise electricity tariffs, restructure power sector debt, and revise tax structures within electricity bills.
Leghari added that talks are ongoing with development partners to reduce taxes and promote the adoption of electric vehicles, addressing both the need for cleaner transportation and the growing air pollution problem.
Earlier, Energy Minister Awais Khan Leghari announced the dissolution of the National Transmission and Dispatch Company (NTDC) on Saturday, dividing it into three companies with specific tasks.
Addressing a news briefing, the minister said the NTDC has been divided into three entities — the Independent System Market Operator, the National Grid Company, and the Energy Infrastructure and Development Management Company (EIDMC). Meanwhile, the National Grid Company would continue the system operations of NTDC.
While accusing NTDC of creating hurdles and challenges in the power sector, the minister said some officials were even involved in power theft. Sharing the charge-sheeting, the minister said NTDC has promoted inefficiency, failed to curb corruption and caused undue delay in various projects.
He said the Independent System Market Operator would look into market sales and purchases and end the state’s monopoly on consumer electricity sales.
He added that EIDMC would ensure the timely completion of projects and work to end flaws in the distribution system.
The minister said that due to NTDC, a power project scheduled to be completed in 2016 was delayed until 2020.
