Pakistan abolishes electricity duty in bills to ensure tariff transparency

Arab News

a day ago

ISLAMABAD: Pakistan has abolished electricity duty in power bills from the month of July, the country's energy ministry said on Monday, in a bid to ensure transparency in tariff.
Power Minister Awais Leghari had written letters to chief executives of all provinces and informed them about the decision to discontinue the collection of electricity duty, according to the ministry.
He said high electricity tariffs were already a challenge and the additional burden of various levies further complicated the billing structure, making it difficult for consumers to manage their power costs.
'As part of this initiative, the Power Division has decided to discontinue the collection of electricity duty through electricity bills starting from July 2025,' Leghari was quoted as saying.
'We request provincial governments to explore alternative mechanisms for collecting provincial levies and duties, rather than relying on electricity bills as a collection channel.'
He said the federal government was making structural reforms to reduce tariffs such as renegotiating contracts with Independent Power Producer (IPP) and lowering the Return on Equity (ROE) for government-owned power plants, according to the energy ministry statement.
Leghari sought support from the provincial chief ministers in removing the complexity arising from multiple charges, taxes and duties being collected through consumer bills.
'He expressed the confidence that this will not only make electricity bills more transparent and easier to comprehend but also ensure that consumers are paying only for the cost of electricity, rather than a mix of other charges,' the statement read.
Pakistan has aggressively pursued reforms in its energy sector recently, which has long struggled with financial strain due to circular debt, power theft and transmission losses. These problems have led to blackouts and high electricity costs throughout the country, especially during the summers when demand peaks.
On Sunday, Prime Minister Shehbaz Sharif launched a mobile application that allows power consumers to record and submit their meter readings themselves, with the government saying the initiative will lead to more transparency in the system and reduce overbilling.
Electricity bills are generated in Pakistan every month by readings obtained from power meters installed at homes and businesses. These readings show the number of electricity units consumed during a monthly cycle and are taken by meter readers employed by power companies.
Pakistani power consumers have frequently complained of overbilling and incorrect readings taken by meter readers.
'This app... is a revolutionary technological reform whose benefit will reach every consumer in every home,' Sharif said at the app's launch.