🔲 Public Investigative Series | Episode 20Title: How Pakistan’s Electricity System Can Be FixedTopic: Free Electricity🔺 When institutions refrain from providing facts, it becomes the responsibility of the public to pursue the truth.Research and Writing: Syed Shayan🔳 If a retired Supreme Court judge can be granted 2,000 free electricity units, and a High Court judge 800 units per month, even extending to the widow after death, then by the same logic, such privileges should also be extended to a retired teacher, a scientist, a doctor, an engineer, an IT professional, or others who have devoted their lives to serving the nation. However, in the broader national interest, this is not a just or sustainable path. Free or subsidised electricity cannot be treated as a permanent entitlement for any individual.
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According to the Pakistan Business Forum, eliminating free or subsidised electricity for all government officials and power sector employees could save the national exchequer approximately PKR 10 billion annually. A report published in Dawn on 4 September 2023 estimated that the annual cost of free electricity provided to employees and associated government institutions in the power sector stands between PKR 22 to 25 billion. The same report, citing a former DISCO official, suggested that if approximately 120,000 employees consume an average of 300 units per month, at a cost of PKR 50 to 55 per unit, the expense amounts to nearly PKR 2 billion per month, or roughly PKR 24 billion annually.
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Available data indicates that officers in Grades 17 to 22, estimated at around 15,000 to 16,000 individuals, were collectively consuming nearly 7 million free units per month. Even after the withdrawal of their benefit, approximately 173,000 to 174,000 beneficiaries remain, who continue to receive around 21.3 million units per month free of cost.
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Cross subsidy in electricity billing means that consumers are not only paying for their own electricity usage but also covering the cost of those receiving free or subsidised electricity.
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When industrial electricity becomes expensive in Pakistan, domestic products inevitably become costlier compared to competitors in India, Vietnam, and Bangladesh. This reduces export competitiveness, lowers foreign exchange inflows, and pushes investors towards countries with cheaper energy. As industries relocate, unemployment rises, followed by an increase in poverty. This is the critical link that often goes unnoticed.
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Under IMF pressure, subsidies for the general public are reduced swiftly, yet allowances, utility privileges, official residences, and fixed electricity entitlements for the elite remain largely untouched.
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Pakistan’s electricity system has evolved not into a balanced economic model, but into a redistribution model, where relief granted to one segment is financed by burdening another. This results in short term relief for some, but a gradual weakening of the overall economy.
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No individual should qualify for free or subsidised electricity merely because of their institutional affiliation, rank, or geographic location.Government backed electricity benefits in Pakistan exist in multiple forms, yet they all share one common feature: their cost is ultimately borne by the public. Sometimes this burden is absorbed through the national treasury, sometimes embedded within consumer bills through cross subsidy, and at other times it appears in the form of circular debt. In simple terms, these costs eventually find their way back into the electricity bills of ordinary citizens.To understand the structure of free electricity, it can be divided into seven fundamental categories:1. Free Electricity2. Subsidised Tariff3. Monetised Utility Allowance4. State Paid Bills5. Targeted Cash Transfer for Energy6. Opaque Institutional Privileges7. Regional or Territorial SubsidyLet us examine each of these individually.
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️ First Category: Free ElectricityThis refers to electricity provided completely free of cost, with a zero tariff, to specific groups.
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Power sector employees According to records presented in the National Assembly, approximately 200,000 employees were provided 441.5 million units of free electricity annually. This included 149,000 DISCO employees, 12,000 GENCO employees, 12,700 WAPDA employees, 159 PITC employees, 20,000 NTDC employees in service, and 16,000 retired employees.The latest development indicates that, for the first time, a decision has been taken to withdraw this benefit, which has been welcomed by the Federal Minister for Power, Awais Leghari, following the Lahore High Court ruling.
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Government officials and judiciary Utility bills, including electricity, for serving judges of the Supreme Court and High Courts are paid by the government. Additionally, under Section 28 of the High Court Judges Order 1997, retired judges and their spouses after their death are entitled to 800 units per month. Similarly, the President of Pakistan is entitled to 2,000 units under the pension framework, while the utility bills of officials such as the NAB Chairman and the Federal Ombudsman are also paid from the public treasury.This represents the most direct form of free electricity, funded entirely through public resources.
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️ Second Category: Subsidised TariffIn this case, electricity is not free but provided below its actual cost.
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Lifeline and protected consumers Around 2 million lifeline consumers receive electricity at highly subsidised rates, with tariffs as low as PKR 4.78 per unit for up to 50 units, and PKR 9.37 per unit for 51 to 100 units. Protected consumers, representing nearly 58 percent of domestic users or about 16.8 million households, face minimal tariff increases, typically below 2 percent per month.
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Agriculture sector Under the Roshan Muashiyat electricity package, tariffs for agricultural tube wells have been reduced from PKR 38 per unit to PKR 22.98 per unit for the period November 2025 to October 2028.
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Industrial sector Similarly, industrial tariffs have been reduced from PKR 34 per unit to PKR 22.98 per unit to restore competitiveness in global markets. This is not a permanent policy, but a corrective measure in response to historically high industrial tariffs that weakened exports and reduced dollar inflows.While such subsidies support targeted sectors, their financial burden is ultimately transferred either to the government or to other consumers.
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️ Third Category: Monetised Utility AllowanceHere, electricity is not provided directly at a discount, but its cost is compensated through salary or allowances.The Public Accounts Committee in 2022 recommended replacing free electricity for WAPDA employees with a utility allowance. This effectively changes the form of the benefit without eliminating the cost. Similarly, many Grade 17 and above officers receive utility allowances, house rent benefits, or reimbursements, indirectly covering their electricity expenses.This system appears transparent but does not reduce the underlying financial burden on public resources.
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️ Fourth Category: State Paid BillsIn this model, electricity is billed at full cost, but payment is made by the state rather than the user.Senior officials residing in government accommodations do not pay their own utility bills. Instead, these are covered by the national treasury. Beneficiaries include federal and provincial ministers, senior bureaucrats, military officers in cantonments, and members of the higher judiciary.Although presented as an administrative arrangement, the financial burden ultimately falls on taxpayers.
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️ Fifth Category: Targeted Cash Transfer for EnergyThis is a relatively new approach in Pakistan, where instead of reducing tariffs, financial assistance is provided directly to eligible households.The government has committed to linking energy subsidies with the Benazir Income Support Programme so that only low income households benefit. Additionally, the Punjab government has introduced a free solar panel scheme for low income families, prioritising widows, female headed households, and rural communities.
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️ Sixth Category: Opaque Institutional PrivilegesThese are benefits that are neither fully documented in law nor transparently disclosed.
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Military cantonments In more than 56 cantonments across Pakistan, electricity distribution is managed by cantonment boards rather than DISCOs. The tariff structure, payment responsibility, and extent of subsidies remain unclear. Although it has been stated that the military does not consume free electricity, independent verification is not possible due to lack of publicly available data. The real issue here is not just the benefit, but the absence of transparency.
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️ Seventh Category: Regional or Territorial SubsidyIn this case, subsidies are provided to entire geographic regions rather than specific individuals.
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Azad Kashmir Electricity tariffs are lower than the rest of Pakistan, with the federal government covering the difference. Subsidies amounted to PKR 108 billion in 2024 to 2025, reduced to PKR 74 billion in 2025 to 2026.
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Gilgit Baltistan In several areas, electricity is either extremely cheap or nearly free, largely due to small hydropower generation where full cost recovery is not enforced.This category is the broadest, as entire populations benefit regardless of income or status, with the financial burden transferred to the national treasury and other consumers.🔲 Dear readers, the core conclusion of this research is simple: electricity in Pakistan is not expensive because generation costs are inherently high, but because the cost is not shared equally. Some pay fully, while others pay partially or not at all. In other words, the distribution of cost among consumers is neither efficient nor fair.The path to reform lies in adopting a transparent system where electricity tariffs are uniform for all consumers, with no hidden components. Every bill should reflect the true cost, regardless of income, status, or location. This would eliminate market distortions and remove confusion about the real price of electricity.If a uniform base tariff, for example PKR 25 per unit, is implemented for all residential consumers, full cost recovery becomes possible. Financial transparency improves within distribution companies, cross subsidy burdens are eliminated, and circular debt becomes easier to control.If support is required, it should be provided only to eligible households through a verified national social registry, based on income, household size, assets, travel history, and financial condition.Such support should be offered as a percentage discount on the total bill, for example 30 percent or 40 percent, rather than reducing the per unit price. This approach ensures that consumers remain aware of the true cost, encouraging conservation, while also maintaining fiscal transparency for the government.This proposal is aligned with the principles of a National Social Registry and targeted subsidy, widely recognised as the most effective and equitable approach in modern economic systems.
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No individual should be entitled to free or subsidised electricity solely based on institutional affiliation, position, or geographic identity.(Continued in the next episode)
