Pakistan electricity subsidy: Pakistan has committed to the International Monetary Fund (IMF) to eliminate the current electricity subsidy for consumers using up to 200 units per month. This measure is part of a broader reform in the power sector, aiming to introduce a targeted support system through the Benazir Income Support Programme (BISP) starting January 2027.
This policy shift presents a challenge for the government, as many households currently manipulate consumption by installing multiple meters to remain within the subsidized limit. The new targeted subsidy will aim to reduce such misuse by linking support to the National Socio-Economic Registry (NSER) database, ensuring only eligible low-income consumers benefit.
Additionally, Pakistan plans to replicate the e-Abiana irrigation service charges collection in Sindh, Khyber-Pakhtunkhwa, and Balochistan, expanding from its current implementation in Punjab. This initiative will be rolled out by the end of August 2027, alongside the development of irrigation water tariff adjustment mechanisms.
Pakistan is poised to secure a $200 million tranche under the Resilience Sustainability Facility, pending IMF Executive Board approval on May 8, 2026. The government, in collaboration with the World Bank, is working to establish a framework for electricity subsidies and disaster risk financing, further supported by climate-related financial guidelines issued in December 2025.
Published in SouthAsianDesk, May 7, 2026
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