The Senate Standing Committee on Finance on Thursday approved an amendment to raise the maximum surcharge limit in electricity bills to satisfy the International Monetary Fund (IMF).
Power Division sources told ProPakistani that the surcharge cap is being lifted on the IMF’s demand to help reduce Pakistan’s mounting circular debt. Currently, a surcharge of Rs. 2.83 per unit is being collected from domestic consumers and Rs. 3.23 per unit from commercial consumers.
The Senate Committee Chairman Saleem Mandviwala questioned why the burden of circular debt is repeatedly shifted to electricity consumers. Responding to this, the Chairman of the Federal Board of Revenue (FBR) Rashid Mahmood Langrial stated that the debt of Independent Power Producers (IPPs) ultimately belongs to the people. He further added that IPPs earn returns at high interest rates, while the government borrows at lower rates from banks.
Senator Ahmed Khan backed the Power Division’s proposal, saying that the amendment would help shield IPPs from exploitative practices.
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