Govt plans 10% surcharge on electricity bills to tackle circular debt

Islamabad: The government has planned to impose a 10% surcharge on electricity bills in an effort to control the growing circular debt.

According to details, an amendment will be made to the NEPRA Act to enable the implementation of this surcharge on electricity bills.

The report states that a framework will be introduced to facilitate the plan, after which the federal government will have the authority to impose the surcharge under the Debt Servicing Surcharge (DSS) mechanism.

According to energy experts, this is a politically risky move, but it is being undertaken to revive the energy sector and stay aligned with IMF-supported reforms.

Finance Minister Muhammad Aurangzeb stated during his budget speech yesterday that any DSS surcharge will be used solely for repaying the principal amount of the current circular debt through refinancing.