Rs3.23/kWh DSS for 6 years: Business community slams govt for ‘celebrating’ continuation

ISLAMABAD: The country’s business community has strongly criticized the government for celebrating the continuation of the Debt Service Surcharge (DSS) of Rs 3.23 per kWh for the next six years. The surcharge is intended to repay a Rs 1.225 trillion loan being raised from 18 banks to address the circular debt crisis.

The issue was discussed during a public hearing organized by the National Electric Power Regulatory Authority (NEPRA) to gather feedback from stakeholders on a proposed positive adjustment of Rs 0.1911/kWh under the Fuel Cost Adjustment (FCA) mechanism for August 2025. Chairman Nepra, Waseem Mukhtar, presided over the hearing.

Chief Executive Officer of the Central Power Purchasing Agency – Guarantee (CPPA-G), Rihan Akhtar, informed participants that a negative adjustment of Rs 1.79/kWh for September 2025 will end, and a positive adjustment of Rs 0.1911/kWh will be applied.

Circular debt stock brought down to Rs1.614trn: Leghari

This will result in a net positive impact of Rs 1.98/ kWh for consumers of both DISCOs and K-Electric to be recovered in the bills of October 2025. This adjustment means consumers will bear an additional burden of over Rs 27 billion, primarily due to technical constraints in the transmission system.

Nepra Member (Technical), Rafique Ahmad Shaikh, questioned the fairness of passing the cost of system inefficiencies onto consumers.“Why should the consumers pay the price for inefficiencies in the system?” he remarked. Rafique Shaikh expressed anger at a representative M/s Zong for asking irrelevant questions.

On the issue of DSS, Rehan Javed from Karachi enquired whether the DSS rate of Rs 3.23/kWh increases if the stock of circular debt increases?

He further stated that the DSS, which is a non-tariff item, is already being paid for by the consumers. Doesn’t it mean that this practice will continue for the next five years? “We are very disappointed with the celebration of new loans to be repaid from the DSS of Rs 3.23/kWh, which has been imposed on the consumers. Is there any justification for celebrations?” he added.

The CEO CPPA-G refused to respond to the question about administrative matters (celebrations at the PMO). On the technical aspect of new loans, he, however, said it is based on KIBOR negative 19 basis points with a floor, adding that with a decline in KIBOR, it will be available at a lower KIBOR. However, if KIBOR increases over 14 percent, payments will not be made to the banks, as this delta has to be absorbed by the banks.

Copyright Business Recorder, 2025