Karachi, June 27, 2026: Pakistan’s electricity consumers are being forced to shoulder the cost of years of mismanagement, weak governance and stalled reforms in the power sector, according to Khurram Ijaz, Secretary General of the Businessmen Panel Progressive (BMPP) and former Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).
Citing the Auditor General of Pakistan’s (AGP) Audit Report 2025-26, Khurram Ijaz urged the federal government to immediately review the Debt Service Surcharge (DSS), arguing that the Rs3.23 per unit levy has become a mechanism for passing the financial consequences of institutional failures directly onto households and businesses.
“The audit lays bare an uncomfortable reality: instead of fixing the power sector, consumers are repeatedly being asked to pay for its failures,” he said.
Khurram Ijaz said the AGP’s findings expose a widening disconnect between the government’s reform agenda and the sector’s actual performance. Although the National Electricity Policy and National Electricity Plan (2023–27) promised a competitive, consumer-focused and financially sustainable electricity market, the audit shows the sector continued to post deficits averaging 2.8 percent of GDP between FY2014 and FY2024.
He noted that while circular debt declined from Rs2.39 trillion in June 2024 to Rs1.61 trillion by June 2025, the AGP concluded that the reduction resulted primarily from commercial borrowing and fiscal interventions rather than the structural reforms repeatedly promised by policymakers.
“Reducing circular debt through borrowing is not reform—it simply postpones the problem while consumers continue to pay higher electricity bills,” Khurram Ijaz remarked.
The audit also paints a troubling picture of operational inefficiency. Public sector distribution companies (DISCOs) recorded nearly Rs265 billion in transmission and distribution (T&D) losses and another Rs132 billion in poor recoveries during FY2024-25, significantly fuelling the country’s circular debt crisis.
Khurram Ijaz said these figures demonstrate that the real drivers of the financial crisis remain unaddressed.
“Consumers are paying more every year, yet electricity theft, technical losses, weak recoveries and poor governance continue almost unchecked. This cannot be called reform,” he said.
He also highlighted the AGP’s observation questioning the fairness of imposing the Debt Service Surcharge on K-Electric consumers despite the utility not contributing to Pakistan’s circular debt, describing the issue as one that raises fundamental concerns about transparency, fairness and consumer rights.
According to the audit, actual transmission and distribution losses climbed to 17.55 percent during FY2024-25 against the National Electric Power Regulatory Authority’s approved benchmark of 11.77 percent. Khurram Ijaz said widespread electricity theft, defective metering, inaccurate billing and delayed recoveries continue to drain billions of rupees from the sector while law-abiding consumers face ever-increasing tariffs.
He further warned that persistent overbilling complaints and billing inaccuracies have seriously eroded public confidence in electricity distribution companies.
Another major concern highlighted by Khurram Ijaz is the country’s ageing and inadequate transmission network, which contributed to capacity payments of nearly Rs1.9 trillion during FY2024-25. He said repeated delays in strengthening transmission infrastructure have prevented Pakistan from fully utilising available electricity generation, forcing consumers to bear the cost of an inefficient system.
While welcoming the proposed 800 MW market allocation and wheeling initiative, he said its limited scale falls well short of the reforms needed to introduce genuine competition and reduce dependence on the single-buyer electricity model.
“The AGP’s report confirms what businesses have been warning for years: governance failures, inefficient distribution companies, delayed infrastructure investment and slow implementation of reforms continue to undermine Pakistan’s electricity sector,” he said.
Khurram Ijaz stressed that Pakistan’s manufacturing sector cannot become globally competitive while electricity prices remain inflated by inefficiencies rather than actual production costs.
He called on the federal government to undertake a comprehensive review of the electricity tariff regime, immediately reconsider the Debt Service Surcharge and implement long-overdue structural reforms, including stronger governance of DISCOs, aggressive anti-theft enforcement, accelerated transmission upgrades, improved billing systems and greater private sector participation.
“Pakistan cannot continue asking consumers and industries to finance inefficiency,” he concluded. “Until structural reforms replace temporary fiscal fixes, electricity users will continue paying the price for failures they did not create.”
