The Power Division has prepared a new plan to reform electricity subsidies across Pakistan. Under the proposed framework, most consumers will gradually pay the full cost of electricity. Only eligible households will receive targeted support through the Benazir Income Support Programme (BISP).
Officials said the reforms aim to improve transparency and reduce inefficiencies in the power sector. Broad-based electricity subsidies will no longer be applied. Instead, financial support will be strictly limited to budgeted allocations and verified households. The Power Division has already started collecting and validating consumer data in collaboration with BISP to ensure accurate targeting.
IMF to Be Briefed on Electricity and Tariff Reforms
The Power Division plans to brief the International Monetary Fund (IMF) on the new subsidy framework and ongoing tariff restructuring. Officials said this step is part of discussions on fiscal discipline and sustainable energy pricing.
The reforms will also phase out cross-subsidies, where some consumer groups pay higher rates to offset lower charges for others. Authorities emphasized that no additional financial burden will fall on other consumers. Only subsidies included in the federal budget will be disbursed, and these will go exclusively to eligible households.
Gas Sector Cross-Subsidies
The Power Division is also reviewing cross-subsidies in the gas sector, which currently total around Rs225 billion. While these subsidies will continue in the upcoming budget, long-term policy may eventually phase them out to improve financial sustainability.
Officials said the electricity reforms are part of broader efforts to streamline energy pricing, increase efficiency, and ensure that support reaches households who genuinely need it.
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The planned changes reflect Pakistan’s aim to modernize the electricity sector and reduce hidden financial pressures on both consumers and providers. The government will continue monitoring the reforms to ensure smooth implementation.
