Pakistan Plans Electricity Subsidies Only for ‘Deserving Consumers’ if IMF Approves

he Power Division Pakistan has finalized a plan to limit electricity subsidies only to eligible households, targeting low-income consumers identified through the Benazir Income Support Program (BISP). The plan will be discussed with the International Monetary Fund (IMF) as part of ongoing energy sector reforms.

Under the proposed framework:

• All electricity consumers will pay the full cost of power.
• Subsidies will be allocated only to low-income households based on verified BISP data.
• Cross-subsidies will be eliminated, preventing the burden from shifting to other consumers or sectors.
• Subsidies will be budgeted and targeted, ensuring fiscal discipline.

The measure is part of a broader push to restructure tariffs and strengthen Pakistan’s energy sector sustainability. The Petroleum Division is also planning to phase out gas sector cross-subsidies, currently estimated at Rs. 225 billion, which will be integrated into the federal budget.

Officials have begun coordination with BISP to collect and verify consumer data for accurate subsidy targeting.