Power Minister Awais Announces 45% Cut in Electric Charging Station Tariff to Rs39

Power Minister Awais Announces 45% Cut in Electric Charging Station Tariff to Rs39

Power Minister Awais Leghari announced on Wednesday that the government has taken a “crucial” step to enhance the public’s access to electric vehicles (EVs) by cutting the tariff for electric charging stations by 45 percent.

Pakistan began its transition to electric vehicles (EVs) in 2016-2017, with the National Electric Vehicle (NEV) policy being officially introduced in 2020, as stated by the Ministry of Climate Change. This initiative was initiated because transportation is responsible for 43% of the airborne emissions in the nation.

During a press conference, the power minister noted that Prime Minister Shehbaz Sharif had decided to lower the costs of EVs for the public. “The fees for charging stations will be reduced from Rs71.10 to Rs39.70,” he mentioned, highlighting an approximate reduction of 45%. The power minister also indicated that approvals for installing charging stations would be granted within 15 days.

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He criticized the reliance on petrol and diesel, noting that the country faced a $6 billion import bill that burdened foreign exchange. As a result, the government made a decision today to enhance the accessibility of EVs for the populace. “Thus, we decided today — following a meeting led by the prime minister, it was resolved that the charging station tariff previously billed by distribution companies at Rs71.10 would be lowered by about 45% to Rs39.70,” he explained, adding that this reduction in electricity costs would allow owners of electric motorcycles and small cars to utilize those charging stations more efficiently.

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Awais did not specify the timeline for implementing the new tariff system. “We aim for investors and consumers to gain from this policy,” he mentioned. He emphasized that reduced tariff rates for EV charging stations would incentivize even two-wheeler and three-wheeler users to transition away from petrol vehicles. Leghari indicated that the government would facilitate green energy loans for owners of two- and three-wheelers to purchase batteries. The minister stated that energy imports constitute a significant portion of the nation’s external payments, and supporting electric vehicles would help conserve foreign currency reserves.

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Revamping the energy sector is crucial to the International Monetary Fund’s (IMF) $7 billion rescue package for Pakistan’s economy. In November 2024, despite concerns from major stakeholders, the government unveiled the New Energy Vehicle (NEV) policy to convert 30% of all new vehicles—imported and locally produced—in Pakistan to electric power by 2030. This policy encompasses electric cars and other innovative energy alternatives such as hydrogen. As part of this initiative, the government has rolled out subsidies of Rs50,000 for electric motorcycles and Rs200,000 for three-wheelers (rickshaws), amounting to a total budget of Rs4 billion. These subsidies will be allocated through auction processes. Two companies have received licenses, while 31 additional applications are currently being evaluated.

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Furthermore, it was noted that the IMF has no objections regarding the tax exemptions and subsidies outlined in the NEV policy. Additional initiatives include providing free electric bikes or scooters to 120 top-performing students and lowering tariffs on EV components to promote local manufacturing. The government plans to set up a New Energy Fund and a New Energy Vehicle Centre to support these efforts. The leading global EV manufacturer, BYD Group from China, has secured a manufacturing license in Pakistan. Dewan Motors is preparing to introduce its EVs under the completely knocked down (CKD) license.

Initiative to combat climate change

Prime Minister Shehbaz Sharif, while addressing the federal cabinet, described the move to lower the tariff for electric charging stations as essential for addressing climate change. “To encourage electric vehicles — which will help reduce pollution — the commercial aspects, whether it’s for supporting charging stations or production facilities, must be considered as the tariff of Rs70 is not feasible,” he stated, noting that countries worldwide are swiftly advancing electric vehicle culture by offering support and incentives. “Thus, I appreciate the proposal from the Minister of Power and his team,” he added.

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The federal cabinet approved the power division’s recommendation yesterday to renegotiate settlement agreements with 14 independent power producers (IPPs) to lower electricity expenses and save Rs1.4 trillion for the national treasury. Following discussions with the 14 IPPs under the updated agreements, the cabinet recommended reducing Rs802 billion in profit and costs for these producers. Additionally, Rs35 billion in excess profits from previous years will be subtracted from these IPPs.

The meeting members were informed that 10 of the 14 IPPs operate under the 2002 Power Policy, while four others were established under the 1994 Power Policy. It was also noted that an agreement with one IPP from the 1994 policy had already been annulled. The revised agreements are expected to save the government Rs1.4 trillion over their effective period, translating to annual savings of Rs137 billion that will benefit electricity consumers, as conveyed to the meeting participants.