Govt Moves to End Electricity Duty Collection via Bills
In a major policy shift aimed at simplifying electricity billing and reducing the burden on consumers, the federal government has announced its decision to discontinue the collection of Electricity Duty through electricity bills starting July 1, 2025. The move is part of a broader strategy to streamline energy costs and improve billing transparency.
In letters addressed to all provincial Chief Ministers, Minister for Power Sardar Awais Ahmed Khan Leghari at the Ministry of Energy urged provincial governments to support the initiative by identifying and implementing alternative methods for collecting provincial levies and duties. The letters emphasized the need to remove complexities arising from the inclusion of multiple charges, taxes, and duties in electricity bills, which have made it difficult for consumers to understand and manage their energy expenses.
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The government noted that high electricity tariffs are already a source of financial strain for citizens, and the addition of various levies only worsens the situation. “Electricity bills should primarily reflect the actual cost of power consumption, rather than serve as a platform for collecting a host of unrelated charges,” the letter stated.
As part of its ongoing power sector reforms, the federal government is also working to reduce power tariffs through several structural changes. These include renegotiating contracts with Independent Power Producers (IPPs), lowering the Return on Equity (ROE) for government-owned power plants, and eliminating non-electricity-related charges from billing.
The Ministry called on provincial governments to explore alternative revenue collection mechanisms that do not rely on electricity bills as a collection channel. This step, officials believe, will not only simplify billing but will also enhance public trust and improve the transparency of the utility billing process.
The federal government expressed confidence that with the cooperation of provincial administrations, the initiative will lead to a more consumer-friendly billing structure and contribute to a fairer and more efficient power sector.
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