In a move likely to stir public concern, the federal government has proposed imposing a 10% surcharge on electricity bills to help repay the ballooning circular debt, according to the Finance Bill presented alongside the Budget 2025-26.
The loan payment surcharge, as recommended in the Finance Bill, will target electricity consumers nationwide, with the revenue collected earmarked specifically for clearing power sector liabilities.
To facilitate this move, the government is also recommending amendments to the NEPRA Act, effectively giving it the legal authority to slap surcharges on electricity bills. However, officials say the application of this surcharge will be considered on a case-by-case basis, implying it may not be rolled out universally or all at once.
According to the budget documents, this measure is part of a broader fiscal effort to tame the circular debt crisis, which continues to haunt Pakistan’s energy sector and burden state-owned power companies.
Analysts say while the proposal could help reduce financial stress in the power sector, it’s also likely to be unpopular with consumers already reeling from high inflation and frequent tariff hikes.