The Ministry of Energy has announced a significant reduction in electricity prices by June, promising relief to consumers amidst growing concerns over high energy costs.

During a meeting of the Senate Standing Committee on Energy, chaired by Senator Mohsin Aziz, key measures to address the energy crisis were discussed, including the renegotiation of contracts with independent power producers (IPPs).

The power secretary informed the committee that consumers could benefit from relief amounting to Rs802 billion if contracts with 15 IPPs are terminated. Additionally, the closure of five IPPs is saving Rs411 billion, while converting the tariff rate of eight IPPs from dollars to rupees and reviewing contracts could provide a cumulative relief of Rs1,040 billion.

The ministry also plans to abolish the capacity payment condition for 15 IPPs, which are currently operating under the "take-and-pay" system.

A significant overhaul of the power sector is underway, with plans to privatize nine out of the 11 distribution companies (DISCOs) to improve efficiency and reduce losses. The privatization process will occur in phases:

Phase 1: IESCO, FESCO, and GEPCO
Phase 2: LESCO, MEPCO, and HAZECO
Phase 3: HESCO, SEPCCO, and PESCO

DISCOs with high losses, such as TESCO and QESCO, will not be privatised.

During the session, committee member Shibli Faraz remarked that changes were being made in the power sector around the world. He questioned the energy minister's claim of offering "cheap electricity in the region," asking whether it was a genuine effort or a political statement.

With circular debt and losses in the hundreds of billions, the PTI leader sought clarification on the feasibility of making electricity cheaper in the current economic scenario. "How much scope do you have to make electricity cheaper?" he asked.

The government is under pressure to modernize its power sector in line with global trends. Shibli Faraz criticised the continued reliance on outdated models, emphasizing the need for innovation to reduce costs and improve efficiency.