Pakistan's power sector has long been trapped in a vicious cycle of inefficiencies and mounting circular debt. Consumers have repeatedly been told that the only way to keep the system afloat is through higher tariffs and stricter recoveries. Yet the latest audit finding have revealed that distribution companies overbilled consumers by Rs47 billion in a single month.
Nearly 279,000 consumers received inflated bills, with Lahore Electric Supply Company accounting for the overwhelming majority of the overbilling. More troubling is the allegation that the exercise was a deliberate attempt by lower-level officials to hide electricity theft and line losses. The government has renegotiated contracts with independent power producers, reduced subsidies under IMF commitments and repeatedly pledged to tackle circular debt. Yet the weakest link in the chain has remained largely untouched. Distribution companies continue to post high transmission and distribution losses while recovery targets remain elusive in many regions. The burden, meanwhile, keeps shifting in one direction. Compliance cannot be sustained on coercion alone. It depends just as much on trust. The official response – that smart meters are being installed and that such complaints have subsided – is welcome but hardly reassuring. Pakistan has been hearing about smart metering for nearly two decades. True that technology can reduce human discretion, but it cannot compensate for weak institutions. The real issue is accountability.
The scandal also comes at a time when the government is pushing ahead with the privatisation of several DISCOs, arguing that private management will improve efficiency and reduce losses. Those responsible must face consequences proportionate to the damage caused. Apart from that, billing cannot remain a closed administrative process controlled solely by the distribution companies themselves. Meter readings and billing records should be fully digitised to minimise human discretion, while an independent regulator or third-party auditor should periodically verify their accuracy.
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