Pakistan Plans Major Changes to Electricity and Gas Subsidy System

Pakistan is preparing to change its electricity and gas subsidy system under the conditions set by the International Monetary Fund (IMF). The government plans to end cross-subsidies and the existing slab-based system, limiting subsidies to eligible consumers.

Officials in Islamabad said work has started on a socioeconomic registry to identify deserving consumers. The registration process is targeted for completion by November.

The registry will be linked to the Benazir Income Support Programme (BISP) database after the verification of consumer data. The new system will determine which electricity and gas consumers qualify for subsidies.

The government aims to end tariff differential subsidies and cross-subsidies in the electricity sector by January 2027. Gas consumers will be linked to the socioeconomic registry from July 1, 2027.

Officials said the Power Division has started work on the registry with the support of the World Bank.

Sources also said the IMF has been briefed on the privatisation of electricity distribution companies and reforms in the power sector.

The government plans to speed up energy sector reforms to reduce the pressure of circular debt.