The federal government has decided to withdraw the recent increase in electricity prices for consumers using up to 200 units per month, in a significant relief for millions of households.

This decision, driven by Prime Minister Shehbaz Sharif's directive, is set to provide substantial financial relief to low and middle-income families across the country.

The federal cabinet has accorded approval to a summary about the price hike withdrawal through circulation.

Prime Minister Sharif has instructed that the approval of the circulation summary be taken from the federal cabinet on an emergency basis to expedite the implementation of this relief measure. According to the government’s plan, the revised tariffs will be applicable to the consumers using up to 200 units of electricity from July to September 2024.

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To offset the impact of this decision, the federal government will provide a subsidy of approximately Rs50 billion. This substantial subsidy is aimed at cushioning the financial burden on the national exchequer while ensuring that consumers receive immediate relief on their electricity bills.

For lifeline customers, who are among the most economically vulnerable segments of society, the government has maintained the existing tariffs to provide continuous support.

- Consumers using up to 50 units per month will continue to pay a tariff of Rs3.95 per unit.
- Consumers using between 51 and 100 units per month will have their tariff remain at Rs7.74 per unit.

With the prime minister's endorsement, the increase for consumers using up to 200 units will be officially withdrawn today (Tuesday). This decision reflects the government’s commitment to alleviating the economic pressures faced by citizens, particularly in light of the current economic challenges.

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Later in the day, Prime Minister Sharif officially announced relief for consumers affected by the annual rebasing of electricity prices that came into force in July. Address a news conference along with federal ministers, the PM said a huge sum of Rs50 billion had been allocated for the relief of the poor and middle class.

He said under this package, relief will be given to 94% of domestic consumers, while the recent increase in the price of electricity will not be applicable to protected and non-protected consumers who consume up to 200 units of electricity.

The PM also said that this special relief was being given for the three months of summer (July, August, September). This decision will benefit about 26 million electricity consumers and reduce inflation, he claimed.

Consumers using electricity up to 200 units will get relief of Rs4 to Rs7 per unit, PM Sharif announced.

According to recent estimates, the country is grappling with a significant electricity shortfall of 5,600 megawatts, leading to extensive load shedding across both urban and rural areas. According to sources in the Power Division, the national power demand stands at 25,000MW, while production is lagging at 19,400MW.

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As a result, electricity load shedding has reached up to eight hours in urban areas and 10 hours in rural regions. In areas experiencing high line losses, residents are enduring even longer durations of 12 to 14 hours without power.

On July 5, Pakistanis grappling with inflation received another blow as the National Electric Power Regulatory Authority (NEPRA) announced a massive hike in power tariff. The new tariff translates to a hike of Rs3.32 per unit, which will directly impact household and business budgets.