LAHORE: In a major relief move, the Punjab government announced that it will finance a significant power tariff reduction by utilizing billions in profits and savings from two of its state-owned power companies — Quaid-e-Azam Thermal Power Pvt Ltd and Punjab Thermal Power Pvt Ltd.
The provincial cabinet approved a 30-40% tariff cut for electricity generated by these plants, aligning with the federal government’s earlier initiative of renegotiating contracts with Independent Power Producers (IPPs) to lower costs.
According to officials, both thermal power companies will forgo annual profits of Rs12-13 billion and will not withdraw around Rs12 billion in existing savings. These resources will be redirected to offer electricity bill relief. The anticipated 30-40% tariff reduction will be formally conveyed to the federal government to contribute toward a nationwide tariff cut.
Experts in the power sector have welcomed the initiative, suggesting further cost-saving measures — such as reduced bank markups, eliminating dollar-based payments, and cutting insurance costs — could unlock additional financial room. They noted that while shifting loans to government accounts could have provided long-term benefits, the current move still marks a commendable step toward national relief.
This follows the federal government’s February claim of securing Rs1.571 trillion in future savings through revised agreements with 27 IPPs, including contract terminations and tariff revisions.
In related developments, the Punjab cabinet also approved the Chief Minister Wheat Program 2025 and greenlit the launch of ‘Air Punjab Private Limited Company’ — the province’s first airline — targeted to begin operations within a year. Additionally, CM Maryam Nawaz ordered a crackdown on vaping, directing a ban on vape stores and tasking the Labour Department with enforcing safety SOPs for workers within a month.
Punjab’s Energy Secretary Dr. Naeem Rauf confirmed that NEPRA will be approached to revise the power purchasing agreements to reflect the new tariffs permanently.
Story by Ahmad Fraz Khan
