The Senate Standing Committee on Finance on Thursday approved an amendment to increase the maximum surcharge limit on electricity bills, a move aimed at satisfying the International Monetary Fund’s (IMF) demands to help reduce Pakistan’s growing circular debt.

According to sources from the Power Division, the surcharge cap is being lifted at the IMF’s insistence. Currently, domestic consumers pay a surcharge of Rs. 2.83 per unit, while commercial consumers are charged Rs. 3.23 per unit.

Senate Committee Chairman Saleem Mandviwala questioned why the burden of circular debt is repeatedly passed on to electricity consumers. In response, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial explained that the debt owed to Independent Power Producers (IPPs) ultimately falls on the public. He noted that IPPs earn returns at high interest rates, whereas the government borrows at lower rates from banks.

Senator Ahmed Khan supported the Power Division’s proposal, stating that the amendment would protect IPPs from exploitative practices and ensure smoother financial management within the power sector.