Extra Losses by Power Companies in 2023 Cross Rs. 277 Billion, Audit Reveals
Following the shocking revelations of overbilling by power companies in 2023, a new audit has uncovered another layer of financial distress in Pakistan’s power sector in form of extra losses by power companies in 2023. This time, the focus is not on inflated consumer bills but on the Rs. 276.81 billion in extra losses incurred by electricity distribution companies (DISCOs) due to technical inefficiencies, high transmission and distribution (T&D) losses, and poor revenue recovery. The alarming audit report highlights how these systemic failures continue to widen the circular debt crisis and undermine billions in government investment meant to stabilize the energy grid.
What Are the Latest Extra Losses by Power Companies in 2023?
An official audit report has revealed that Pakistan’s power distribution companies (DISCOs) suffered extra financial losses totaling Rs. 276.81 billion during the fiscal year 2023–24. These losses were primarily attributed to rising transmission and distribution (T&D) losses, widening the country’s energy revenue gap.
How High Were the T&D Losses Compared to NEPRA’s Target?
The audit found that:
- Actual T&D losses reached 18.31%
- NEPRA’s target for the year was 11.77%
This deviation created a significant shortfall in expected recoveries, fueling the circular debt crisis.
Which Power Companies Incurred the Most Extra Losses?
Here is a breakdown of DISCOs with the highest extra losses:
| Company Name | Extra Losses (Rs. Billion) |
|---|---|
| PESCO – Peshawar | 97.17 |
| LESCO – Lahore | 47.63 |
| QESCO – Quetta | 36.75 |
| SEPCO – Sukkur | 29.00 |
| HESCO – Hyderabad | 23.18 |
| MEPCO – Multan | 22.66 |
| GEPCO – Gujranwala | 9.22 |
| IESCO – Islamabad | 5.87 |
| FESCO – Faisalabad | 5.00 |
What Is the Impact on Circular Debt and Revenue Recovery?
The audit revealed that:
- Circular debt increased by over Rs. 235 billion
- DISCOs recovered only Rs. 3,885 billion out of a targeted Rs. 4,081 billion
- This shortfall highlights a growing gap in bill collection efficiency
Despite investing Rs. 163 billion to improve performance, results remained below expectations.
Why Are Consumers Still Paying Debt Servicing Surcharges?
One of the audit’s most alarming findings was that consumers are being charged a debt servicing surcharge, despite these systemic inefficiencies. Instead of improving governance, the burden is shifted to end-users.
The Auditor General of Pakistan recommended:
- Shifting focus from consumers to corporate accountability
- Enforcing strict recovery mechanisms
- Implementing transparency and governance reforms
How Do Extra Losses Affect Electricity Tariffs?
Extra losses in transmission directly contribute to:
- Higher electricity tariffs
- Increased monthly fuel price adjustments
- A growing burden on household and industrial consumers
Despite significant government investment, DISCOs in Pakistan failed to curb transmission losses, causing an alarming Rs. 277 billion in extra financial strain. With revenue shortfalls and growing debt, the burden unfairly falls on consumers.
FAQs
What are T&D losses in Pakistan’s power sector?
T&D losses refer to electricity lost during transmission and distribution, often due to theft, outdated grids, or poor maintenance.
How much did DISCOs lose in extra losses in 2023?
Pakistan’s power companies incurred Rs. 276.81 billion in extra losses in the 2023–24 fiscal year.
Which power company had the highest loss?
PESCO (Peshawar Electric Supply Company) topped the list with Rs. 97.17 billion in extra losses.
How does circular debt impact electricity rates?
High circular debt increases electricity tariffs due to unmet revenue targets and reliance on debt recovery surcharges.
Can governance reforms reduce T&D losses?
Yes. Implementing accountability measures, upgrading infrastructure, and reducing theft can significantly reduce transmission losses.