In a recent briefing by Pakistan’s top energy sector manager, Secretary Power Rashid Langrial disclosed that honest electricity consumers in Pakistan are being overcharged and robbed of Rs675 billion annually.
Out of the total electricity subsidies of Rs900 billion, the government covers only Rs327 billion, and the rest is recovered from consumers. This leaves a balance of Rs573 billion to be recovered from domestic, commercial, and industrial consumers.
Langrial also revealed that Punjab-based power distribution companies (DISCOs) engage in overbilling by at least Rs100 billion annually to inflate their performance metrics. This candid briefing highlights the financial burden on consumers due to inefficiencies and the state’s inability to collect due taxes. Despite this revelation, no details about actions against power sector officials for overbilling were shared.
The secretary emphasized the need for privatizing DISCOs as a viable solution to address these issues, abandoning previous plans to hand them over to provinces. The capacity payments, influenced by factors like low industrialization, foreign-funded power plants, and lack of competition, are expected to increase to Rs2.2 trillion in the next fiscal year. Langrial admitted that there are no short-term solutions to high electricity prices, and it will take considerable time to bring costs down.
The government’s anti-theft campaign has saved Rs63.6 billion through cash recoveries and reduced electricity theft. The power sector’s liabilities for the current fiscal year stand at Rs3.5 trillion against an estimated revenue of Rs2.5 trillion, resulting in a significant gap of Rs976 billion.
