Anjum Nisar says DISCOs losses drain Rs397bn but govt hikes tariffs rather than fixing system
ISLAMABAD, JAN 18 /DNA/ – The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel (BMP) has strongly criticised the federal government for persisting with excessively high electricity tariffs while failing to address the deep-rooted inefficiencies of public-sector power distribution companies, warning that this approach is crippling industry, hurting exports and slowing economic recovery.
Former FPCCI President and Chairman of the Businessmen Panel, Mian Anjum Nisar, said the latest findings of the National Electric Power Regulatory Authority’s State of Industry Report 2025 once again exposed the real causes of stress in the power sector, which lie not with consumers or industry but with the continued mismanagement and poor performance of government-owned DISCOs. He said the report clearly showed that transmission and distribution losses and recovery shortfalls alone drained nearly Rs397 billion during FY2024-25, yet the government continues to compensate for these failures by raising tariffs instead of fixing the system.
Mian Anjum Nisar said that despite repeated claims of reforms, DISCOs recorded average T&D losses of more than 17 percent against an allowed benchmark of around 11 percent, while recovery performance also remained below targets. He said these losses were not due to industry consumption but because of theft, outdated infrastructure, weak governance, incorrect meter readings and poor enforcement. However, instead of holding DISCOs accountable, the cost of inefficiency was being passed on to honest consumers and productive sectors through higher electricity rates.
He said the government’s policy of managing circular debt through fiscal injections and tariff hikes had failed to deliver sustainable results. While circular debt numbers may have temporarily improved, this was achieved through budgetary support and additional surcharges rather than genuine operational improvements. He pointed out that industrial and commercial consumers were being asked to shoulder the burden of inefficiencies over which they had no control, making electricity in Pakistan one of the most expensive inputs in the region.
The BMP chairman warned that high energy prices were pushing many businesses to the brink, particularly export-oriented sectors already struggling with global competition. He said electricity tariffs in Pakistan had reached levels far above those in competing regional economies such as Bangladesh, India and Vietnam, where governments prioritised affordable energy to support exports and job creation. In contrast, Pakistani industry was paying power rates that made locally produced goods uncompetitive in international markets.
Mian Anjum Nisar said that rising electricity costs were not only hurting businesses but also feeding inflation across the economy. He explained that higher energy prices increased production costs, which were ultimately passed on to consumers in the form of higher prices for essential goods. This, he said, was eroding purchasing power and worsening the cost-of-living crisis, making energy pricing a national economic issue rather than just a sectoral concern.
He criticised the continued reliance on practices such as inflated billing, excessive detection charges and pro-rata adjustments, which he said were increasingly being used by DISCOs to artificially improve recovery figures without generating real cash flow. These practices, he added, were creating distrust between consumers and utilities and further damaging the business environment. He said many industrial units were receiving bills that did not reflect actual consumption, forcing them into prolonged disputes and litigation.
The BMP chairman also highlighted that the NEPRA report itself acknowledged that the reduction in circular debt during FY2024-25 was not driven by improved efficiency at DISCOs but by fiscal measures. He said this confirmed what industry had been saying for years: that without structural reforms, losses would continue to accumulate and tariffs would keep rising. He warned that repeatedly passing these costs to consumers was neither economically viable nor socially acceptable.
Mian Anjum Nisar said the contrast between public-sector DISCOs and the privatised K-Electric further demonstrated the need for reform. While K-Electric absorbed the impact of losses internally and did not add to circular debt, public-sector utilities continued to rely on government support and tariff adjustments. He said this showed that efficiency and accountability were possible when proper governance structures were in place.
He stressed that nearly three decades after unbundling, most DISCOs remained government-owned, administratively controlled and commercially fragile, with little incentive to improve performance. He said the failure to introduce meaningful governance reforms, professional management and accountability mechanisms had allowed inefficiencies to persist year after year.
The BMP chairman urged the government to shift its focus from short-term revenue measures to long-term structural solutions. He said energy policy must prioritise loss reduction, theft control, accurate metering and transparent billing rather than relying on tariff hikes to plug financial gaps. He also called for a review of cross-subsidisation policies that place a disproportionate burden on industrial consumers, arguing that such practices discourage investment and export growth.
Mian Anjum Nisar said industry was not asking for subsidies but for a fair and competitive energy pricing framework that reflected actual costs and rewarded efficiency. He warned that unless electricity tariffs were rationalised and DISCO performance improved, Pakistan would continue to lose industries, jobs and export opportunities.
