Islamabad, March 10, 2025 – Energy Minister Awais Ahmad Khan Leghari has categorically stated that no new surcharge will be levied on electricity consumers to manage the staggering Rs 2,400 billion circular debt.
His assurance comes amid speculations suggesting that the government, during its technical negotiations with the International Monetary Fund (IMF), proposed an additional financial surcharge of Rs 2.83 per unit on electricity for the next five years to mitigate the power sector’s financial crisis.
Addressing Geo News on Sunday, the minister dismissed these reports, reiterating that there was sufficient flexibility in the current debt-servicing surcharge of Rs 2.83 per unit already being imposed on electricity consumers. He emphasized that the power division had significantly enhanced its operational efficiency, resulting in financial savings owing to lower interest rates. “We are confident that we will eliminate the circular debt within the next five to six years,” he asserted.
The minister further reassured that the government had briefed the IMF regarding its financial strategies, describing the global lender as a “development partner” in the nation’s economic recovery. He unequivocally declared: “We will not impose any additional burden on electricity consumers in any way.”
Taking a strong stance against the previous Pakistan Tehreek-e-Insaf (PTI) government, Leghari accused it of escalating the circular debt by Rs 1,580 billion during its tenure. In contrast, he maintained that both the former Pakistan Democratic Movement (PDM) government and the incumbent administration had effectively stabilized the circular debt, preventing any significant increase.
Commenting on the current financial situation, the minister revealed that the total circular debt now stood at approximately Rs 2,400 billion, with a portion of it owed to government-owned power plants. He clarified that the government would not resort to bank borrowing to settle these obligations. Instead, strategic negotiations with Independent Power Producers (IPPs) had resulted in revised agreements, leading to a substantial Rs 460 billion reduction in financial liabilities, ultimately providing relief to electricity consumers.
He further disclosed that the government was in discussions with commercial banks to secure Rs 1,200 billion in financing to resolve the remaining circular debt. Addressing concerns regarding the IMF’s stance on taxation policies in electricity bills, the minister described the recent engagements with the global financial institution as “very constructive” and denied any outright rejection of the government’s proposals.
In response to queries regarding solar net-metering agreements, Leghari assured that no amendments would be made to existing policies, reaffirming the government’s commitment to supporting renewable energy initiatives. His remarks aimed to dispel uncertainties surrounding electricity pricing and surcharges while reinforcing the administration’s resolve to stabilize the energy sector without imposing additional financial stress on consumers.