Electricity Likely to Become More Expensive as Government Plans Additional Surcharge in New Budget

Islamabad – The federal government has decided to impose an additional surcharge on electricity consumers in the upcoming fiscal year 2025–26 budget, a move that could lead to higher electricity prices and increased financial pressure on households.
The new budget was presented in the National Assembly recently, with sources indicating that preparations are underway to place an extra financial burden on electricity users. A key proposal under consideration involves amending the NEPRA Act to remove the existing 10% cap on surcharges and grant the government the authority to impose surcharges on a case-by-case and time-bound basis.
Sources further revealed that a surcharge of up to Rs. 3.23 per unit may be levied on electricity bills. However, no final decision has been made yet regarding the exact amount or implementation timeline.
If the amendment is passed, the government will be able to impose additional surcharges on electricity bills based on budgetary requirements or other financial conditions. This move could trigger a fresh wave of inflation and increase the burden on already strained domestic consumers.
Historically, surcharges on electricity bills have been used by the government to pay interest on circular debt. Now, in an effort to reduce this mounting debt, the government plans to secure Rs. 1,275 billion in loans from commercial banks, which will be repaid over the next six years through consumer-paid surcharges.
Energy experts warn that if the proposed amendment to the NEPRA Act is enacted, it could pave the way for continuous increases in electricity prices, directly impacting inflation and escalating the difficulties faced by residential consumers.