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Home Breaking News

Pakistan assures IMF to replace 200-unit power subsidy with targeted system

byCT Report
07/05/2026
in Breaking News, Islamabad, Latest News, Slider News
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ISLAMABAD (Dunya News) – The federal government has decided to abolish the current electricity subsidy mechanism for power consumers and replace it with a new targeted subsidy system.

According to sources in the Ministry of Finance, preparations are underway to implement the new system from January 2027, under which electricity subsidies will be provided through the Benazir Income Support Programme (BISP). Only eligible and deserving consumers will be identified on the basis of BISP data.

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Officials said Pakistan has reached an agreement with the International Monetary Fund (IMF) on changing the subsidy mechanism, and a written assurance has been provided regarding reforms in the power sector subsidy system.

New targeted subsidy framework

Under the new system, tariff differential and cross-subsidy arrangements will be discontinued. The reform aims to eliminate misuse of subsidies, including the practice of using multiple electricity meters to keep consumption below threshold limits.

IMF board to review $1.2bn Pakistan disbursement on May 8

Authorities will link electricity consumers with the National Socio-Economic Registry (NSER), while the World Bank will assist in developing a verification system for identifying eligible beneficiaries. An external firm is also expected to be hired this month to manage subsidy payments.

Wider reforms in irrigation system

Sources said reforms will also extend to the irrigation sector, where an e-Aabiana system will be introduced nationwide. The system is already operational in Punjab and will now be expanded to Sindh, Khyber Pakhtunkhwa, and Balochistan.

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