Electricity users to continue paying debt surcharge for up to 6 years

According to a decision passed by the federal government, the national electricity tariff will remain unchanged for 2026 while Rs 3.23 per unit debt surcharge will be levied for up to six years.

This measure is taken to eliminate the power sector’s circular debt, officials said.

In a statement, the Power Division noted that the surcharge will be eliminated after the circular debt is fully cleared. According to the government’s debt settlement plan, the debt is expected to be fully cleared within five to six years.

The federal government, however, has provided relief to industry and agriculture sectors by introducing a surplus power package. This will allow additional electricity at a concessional rate of Rs 22.98 per unit for three years. This move has been taken keeping the economy in mind, as it will reduce the average industrial and agriculture tariffs.

According to the Power Division, the rising use of off‑grid solar systems has doubled the number of subsidy protected consumers, consequently, straining fiscal resources and increasing cross‑subsidy burdens on commercial and industrial users.

The decision was criticized by analysts claiming that high energy costs will adversely affect investment and exports. Responding to these claims, tthe government said it is exploring subsidy reforms and debt refinancing to further reduce cross‑subsidy pressures.

Furthermore, the Power Division reiterated that industrial cross‑subsidy charges have fallen significantly. Industrial tariffs have also declined compared to 2024.

Reforms are also being made to reduce electricity costs by shutting inefficient power plants and renegotiating contracts with independent power producers.