Prime Minister Shehbaz Sharif has unveiled a major power sector reform, announcing a reduced electricity tariff plan for Pakistan’s industrial and agricultural consumers. The newly introduced “Roshan Maeeshat Electricity Package” aims to stimulate economic growth and encourage higher energy consumption without burdening domestic users or violating International Monetary Fund (IMF) conditions.
Under the new pricing structure, electricity for both industrial and agricultural consumers will now cost Rs23 per unit. The revised rate, which replaces the existing Rs34 per unit for industrial users and Rs38 per unit for agricultural ones, represents a reduction of 32.4% and 39.5% respectively. The package will remain effective for three years, from November 2025 to October 2028, without the possibility of extension or rollover.
Officials involved in negotiations with the IMF confirmed that the plan adheres to strict cost-plus principles, meaning it is subsidy-neutral. The benefit will apply only to incremental consumption—specifically, an additional 25% use compared to the previous year. This ensures that the incentive is tied directly to higher productivity rather than blanket relief.
The prime minister said the new package is a step toward energizing Pakistan’s economy by enhancing the competitiveness of the industrial and agricultural sectors. He stated that the measure would create jobs, increase exports, and strengthen local production while maintaining fiscal discipline.
According to Power Minister Sardar Awais Leghari, the incremental usage will be assessed collectively across both sectors rather than individually. This collective approach, he explained, allows flexibility for users while keeping overall demand within the 25% growth cap.
The base consumption for the fiscal year 2026 has been set at 42.9 billion units, with relief applicable to an additional 10.7 billion units of power use. For 2027 and 2028, the base demand rises to 44 billion and 45.4 billion units respectively, with the same 25% growth threshold applied each year.
Government sources revealed that the price cut is being achieved not through subsidies but by temporarily excluding capacity payment charges from incremental consumption bills. Consumers will still pay capacity charges on usage below the baseline and above the 25% threshold. The effective rate of Rs23 per unit still includes around Rs5 per unit above the energy generation cost, maintaining cost recovery.
The Power Division expects the plan to bring 600 to 1,000 megawatts of consumption back to the national grid, improving capacity utilization and reducing blackout risks. This increased grid usage could also stabilize tariffs by improving fixed cost recovery and help the government generate an estimated Rs21 billion annually through higher tax revenues from increased production and power use.
However, IMF conditions remain firm. The lender has required Pakistan to maintain a uniform rate for all industries and restrict the scheme’s duration to three years. The government must also conduct semi-annual reviews to ensure costs remain within a 25% threshold. Any shortfall in revenue recovery would trigger an automatic tariff adjustment for industrial and agricultural consumers.
The initiative also aims to counter Pakistan’s growing shift toward solar power and underutilization of the national grid. Over 90% of high-consumption users have reportedly turned to solar energy, while 7,000 megawatts of surplus grid electricity lie unused. The package seeks to redirect demand back to the grid and balance the energy mix, ensuring that capacity payments are distributed more efficiently among consumers.
Furthermore, by boosting electricity use, the government hopes to mitigate issues in the LNG sector, where lower power generation demand has created a gas surplus. Increased electricity consumption could raise LNG offtake, improving energy coordination between sectors.
Power Minister Leghari emphasized that the initiative’s long-term goal is to make energy affordable and sustainable while supporting Pakistan’s broader economic recovery. He noted that better grid utilization would lower the burden on paying consumers who currently absorb capacity charges for unused electricity.
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