ISLAMABAD: The federal government has announced that the Rs3.23 per unit debt surcharge on electricity consumers will remain in place for the next five to six years, as it notified a revised uniform national base tariff for the current year without any change.
In a statement issued alongside the tariff notification for all distribution companies (Discos) and K-Electric, the Power Division said the surcharge would be withdrawn once the circular debt is fully cleared. “After the elimination of circular debt, the Rs3.23 per unit debt surcharge will be removed, providing further tariff relief to consumers,” the statement said.
To support economic activity, the government has introduced a surplus power package under which industrial and agricultural consumers can access additional electricity at a concessional rate of Rs22.98 per unit for three years. This initiative aims to lower average industrial power tariffs and enhance competitiveness.
The Power Division acknowledged that the rapid growth of off-grid and hybrid solar consumption has distorted subsidy requirements. As a result, the number of protected consumers has doubled from 11 million in 2021 to around 22 million, increasing fiscal pressure and shifting a heavier cross-subsidy burden onto commercial, bulk supply and high-consuming domestic users.
Responding to concerns over high energy costs—also cited by Finance Minister Muhammad Aurangzeb as a factor behind foreign companies exiting Pakistan—the Power Division said it is exploring further options to reduce cross-subsidies on industrial consumers. These include subsidy reforms and debt refinancing, in addition to existing tariff relief measures.
According to official data, the industrial cross-subsidy burden has declined from Rs225 billion (Rs8.9 per unit) in March 2024 to Rs102bn (Rs4.02 per unit), reflecting a reduction of Rs123bn. Industrial electricity tariffs, including taxes, have fallen from Rs62.99 per unit in March 2024 to Rs46.31 per unit in December 2025, while the national average tariff has decreased from Rs53.04 to Rs42.27 per unit.
The Power Division added that electricity tariffs have been reduced through the termination of inefficient power plants and successful renegotiation of contracts with several independent power producers (IPPs). Further negotiations with remaining IPPs are currently underway to achieve additional cost savings.
Story by Khaleeq Kiani
