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.
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.