ISLAMABAD: The government on Wednesday announced that the Rs3.23 per unit debt surcharge on electricity consumers would remain in place for up to six years as part of efforts to resolve the country’s long-running circular debt crisis.
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The surcharge’s continuation accompanied the notification of a revised uniform national base tariff for all electricity distribution companies (Discos) and K-Electric for the current fiscal year, with no change in the rate.
According to the Power Division, the surcharge would be phased out once circular debt is cleared within five to six years. Officials described the measure as temporary, noting that its withdrawal would eventually provide tariff relief, particularly to industrial users.
The government also introduced a surplus power package allowing industrial and agricultural consumers to purchase additional electricity at a concessional rate of Rs22.98 per unit for three years. The initiative is aimed at lowering average industrial tariffs and driving consumption toward the grid.
At the same time, authorities conceded that the rapid growth of off-grid and hybrid solar consumption had complicated subsidy planning. Protected domestic consumers have doubled from 11 million in 2021 to 22m, increasing the cross-subsidy burden on commercial and industrial sectors.
The Power Division acknowledged complaints regarding high energy costs and the impact on foreign investment and exports. It said reforms would continue, including debt refinancing and targeted subsidy adjustments, to further reduce cross-subsidies on industry.
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Data cited by the ministry showed the industrial cross-subsidy burden dropping from Rs225 billion (Rs8.9 per unit) in March 2024 to Rs102bn (Rs4.02 per unit) at present. Industrial tariffs, including taxes, have declined from Rs62.99 per unit in March 2024 to Rs46.31 in December 2025, while the national average tariff has fallen from Rs53.04 to Rs42.27 per unit.
Additional cost reductions have been achieved through the closure of inefficient power plants and renegotiation of power purchase contracts with independent power producers. Further negotiations with remaining IPPs are ongoing, the Power Division noted.