The federal cabinet on Wednesday postponed approval of the controversial solar net metering policy after several members, including Prime Minister Shehbaz Sharif, expressed dissatisfaction with the proposed changes, sources close to the meeting revealed.
During the cabinet session chaired by PM Sharif, the Premier directed the Power Division to review the policy, which had proposed reducing the buyback tariff for solar users from Rs. 27 per unit to Rs. 8-9 per unit. The government had previously justified the reduction by claiming the current rates place undue pressure on grid consumers.
The cabinet decided to return the policy to the Power Division for further revisions. The decision signals a potential rethinking of the government’s approach to renewable energy incentives.
In the same meeting, the Prime Minister celebrated Pakistan’s successful staff-level agreement with the International Monetary Fund. He noted that the review of the first phase of the $7 billion Extended Fund Facility has been completed, with the IMF approving an additional $1.3 billion for climate change initiatives.
“The IMF’s recognition of Pakistan’s macroeconomic stability, declining inflation—now at its lowest since 2015—and governance reforms reflects confidence in our economic direction,” Sharif stated, crediting Finance Minister Muhammad Aurangzeb and his economic team for securing the agreements.
The cabinet approved several other measures, including a reduction in electricity prices using savings from lower petroleum prices and agreements between the Central Power Purchasing Agency and bagasse-fired power plants under revised terms.
Additionally, the cabinet gave in-principle approval to the Whistleblower Protection and Vigilance Commission Act, 2025, aimed at strengthening transparency and accountability. It also sanctioned amendments to tax regulations within the Islamabad Capital Territory under the Resource Mobilization and Utilization Reform Program.
The Income Tax (Second Amendment) Bill, 2025, which reinstates tax rebates for full-time teachers and researchers, also received cabinet approval. Decisions from the Cabinet Committee on Privatization (March 11) and the Economic Coordination Committee (March 13 and 21) were ratified as well.
Prime Minister Sharif concluded the meeting by emphasizing that Pakistan’s economic policies are focused on achieving long-term stability and sustainable growth, calling for national unity in pursuing prosperity.
