Pakistan to end electricity subsidy for 200-unit users under IMF deal

ISLAMABAD: Pakistan has assured the International Monetary Fund (IMF) to overhaul its electricity subsidy regime, committing to replace the existing blanket subsidy for households consuming up to 200 units of power with a targeted support system by January 2027.

Official sources said that under the proposed reforms, subsidies will be redirected only to eligible consumers identified through the Benazir Income Support Programme (BISP) database, in an effort to curb misuse and improve fiscal efficiency.

According to the official sources, the current system has been widely exploited, with some households installing multiple electricity meters to keep individual consumption below the 200-unit threshold and maximise subsidy benefits.

The government is developing a mechanism to integrate electricity consumers with the National Socio-Economic Registry (NSER), with support from the World Bank, while a third-party firm is expected to help operationalise the new subsidy delivery system, the sources said.

Separately, officials said the government plans to expand Punjab’s e-abiana irrigation billing system to Sindh, Khyber Pakhtunkhwa and Balochistan in the next fiscal year, alongside reforms to adjust water charges in line with operation and maintenance costs.

Officials said that Pakistan is close to receiving a second tranche of $200 million under the IMF’s Resilience and Sustainability Facility (RSF), with the Fund’s executive board scheduled to meet in Washington on May 8, 2026, for approval.