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In a major development aimed at simplifying electricity billing and providing relief to the general public, the government of Pakistan has announced the abolition of the provincial Electricity Duty (ED) from electricity bills across the country. This decision, announced by Federal Minister for Energy Sardar Awais Leghari, is set to take effect from July 1, 2025, and marks a significant step toward transparent, fair, and more understandable utility billing.
Electricity Duty is a provincial surcharge that has been levied on electricity bills for decades in Pakistan. It varies from province to province and has often been criticized as an outdated charge that lacks clarity for consumers. Typically, the duty ranges from 1.5% to 3% of the electricity charges and is collected through monthly utility bills.
For many consumers, especially residential and small commercial users, this additional charge was either overlooked due to lack of awareness or misunderstood as part of federal taxes. In reality, it served as a provincial levy used to generate revenue for provincial governments.
The federal government, in coordination with provincial administrations, has decided to eliminate this duty entirely from all electricity bills starting July 2025. Minister Awais Leghari confirmed that the move is designed to bring greater clarity and fairness to billing processes, allowing consumers to better understand exactly what they are paying for.
This decision is part of broader reforms in the energy sector to simplify the energy billing system and to make it more reflective of actual consumption and power generation costs. Speaking to the media, the energy minister stated:
“Our goal is to eliminate unnecessary and confusing charges. Electricity bills should only reflect the actual price of the electricity consumed, nothing more.”
The decision comes amid widespread concerns over the rising cost of electricity and growing public frustration over inflated or complex utility bills. With electricity tariffs frequently being revised due to IMF agreements, circular debt, and rising fuel costs, even small charges like the Electricity Duty add significant weight to consumer bills.
Public dissatisfaction with electricity bills has reached new heights in recent months, leading to protests in several regions. Removing ED is seen as a goodwill gesture from the government, aiming to ease the financial burden—especially for low- and middle-income households.
The removal of electricity duty may not result in massive savings for each individual household, but it will have a symbolic and psychological impact. More importantly, it represents a step in the right direction toward a transparent and consumer-friendly billing system.
Here’s how it will impact different stakeholders:
Residential users: Will experience a slight reduction in their monthly bills, along with simplified billing statements.
Commercial & Industrial Users: Those with higher consumption will benefit more significantly from the removal of ED, especially in provinces where the duty was high.
Provincial Governments: While they may experience a loss in revenue, the federal government has encouraged them to explore alternative revenue-generating models that do not burden the public.
The federal government is also using this opportunity to call for a complete overhaul of the power sector. Sardar Awais Leghari emphasized the importance of revisiting outdated contracts with Independent Power Producers (IPPs), reducing inefficiencies in state-owned power generation companies, and ensuring that the cost of electricity better reflects actual production and supply costs.
He further announced that the government plans to eliminate hidden charges from electricity bills in phases and encouraged provinces to support broader energy reforms.
Initial public reaction to the announcement has been largely positive. Many consumer advocacy groups, energy experts, and civil society members have welcomed the move, calling it a long-overdue correction.
However, experts caution that while symbolic reliefs are welcome, the government must focus on deeper reforms in transmission losses, billing inefficiencies, and power theft—issues that cost the national exchequer billions every year.
If implemented effectively, the removal of electricity duty could be the beginning of more consumer-friendly reforms in Pakistan’s power sector. It sends a message that the government is aware of public grievances and is willing to act on them.
The decision to abolish electricity duty from electricity bills is a commendable step by the federal government of Pakistan, aimed at creating a more transparent, equitable, and simplified energy billing structure. While the financial relief may be modest in terms of absolute numbers, the symbolic impact of the reform and its potential to pave the way for deeper structural changes should not be underestimated. As Pakistan continues to battle energy sector challenges, such initiatives serve as building blocks toward a more efficient and citizen-focused system.
Reference: بجلی کے بلوں پر الیکٹرسٹی ڈیوٹی ختم کر دی گئی
