ISLAMABAD: The government on Wednesday announced that the Rs3.23 per unit debt surcharge on electricity consumers will continue for up to six years, as it notified a revised uniform national base tariff for the current year without any change.
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In a statement issued alongside the tariff notification for all power distribution companies (Discos) and K-Electric, the Power Division said the surcharge would be withdrawn once circular debt is fully cleared.
“Once the circular debt is cleared, the debt surcharge currently charged at Rs3.23 per unit will be withdrawn, providing further tariff relief to consumers,” the statement said. It added that the government had introduced a surplus power package under which industrial and agricultural consumers can obtain additional electricity at a concessional rate of Rs22.98 per unit for three years, aimed at reducing average industrial tariffs.
The Power Division said a circular debt settlement plan had been launched to eliminate outstanding liabilities within five to six years.
It also acknowledged that the rapid growth of off-grid solar power had distorted subsidy requirements, noting that the number of protected consumers had doubled from 11 million in 2021 to 22 million due to hybrid consumption patterns.
“This has not only strained fiscal resources but has also increased the cross-subsidy burden on industrial and commercial users, undermining their competitiveness,” the statement said. It added that commercial, bulk supply and high-consuming domestic users were currently bearing a significantly higher cross-subsidy burden than the industrial sector.
Addressing criticism over high energy costs — also cited by Finance Minister Muhammad Aurangzeb as a key factor behind the exit of foreign companies and export challenges — the Power Division said it was exploring additional measures to further reduce the burden on industrial consumers. These include subsidy reforms and debt refinancing, in addition to tariff reductions already implemented.
According to official data, the industrial cross-subsidy burden has declined from Rs225 billion (Rs8.9 per unit) in March 2024, when the current government took office, to Rs102bn (Rs4.02 per unit), reflecting a reduction of Rs123bn.
The statement said industrial electricity tariffs, including taxes, had fallen from Rs62.99 per unit in March 2024 to Rs46.31 per unit in December 2025, while the national average tariff declined from Rs53.04 to Rs42.27 per unit.
To further reduce electricity costs, the government has terminated inefficient power plants and renegotiated contracts with independent power producers (IPPs). The Power Division said these measures had already resulted in tariff reductions, with negotiations continuing with remaining IPPs.
