ISLAMABAD: The Pakistani government has officially assured the International Monetary Fund (IMF) that it will eliminate all untargeted cross-subsidies on electricity bills by January 1, 2027.
Under this significant policy shift, the long-standing subsidy for consumers using up to 300 units per month will be abolished, requiring all general consumers to pay the full cost of electricity.
In its place, the government has decided to restrict financial relief exclusively to deserving citizens through the Benazir Income Support Programme (BISP).
To implement this transition, more than Rs. 500 billion in power subsidies will be redirected to the BISP budget starting next fiscal year.
This new mechanism is designed to prevent the misuse of subsidies, particularly by owners of large houses who have historically lowered their bills by installing multiple meters to stay within lower-tariff brackets. Authorities noted that this practice caused the number of “protected” consumers to surge from 10 million to 22 million, a trend the new data-linking system aims to reverse by integrating power utility records with BISP databases.
Eligible consumers will now be required to register for subsidies via a QR code printed on their electricity bills.
The government plans to test this refined targeting system through August before its full nationwide rollout at the start of 2027.
Alongside these energy reforms, the government has also committed to the IMF that it will increase the climate-change priority in national development projects by up to 30 percent.
