Electricity Subsidy for up to 200 Units to be Abolished, Assurance Given to IMF for New System
Pakistan Provides Written Commitment to IMF for Major Overhaul of Power Subsidy Regime — New Targeted System to be Introduced in 8 MonthsIslamabad (International News Agencies) — The Government of Pakistan has given a written assurance to the International Monetary Fund (IMF) regarding a major restructuring of the existing electricity subsidy system.According to official sources,…
Pakistan Provides Written Commitment to IMF for Major Overhaul of Power Subsidy Regime — New Targeted System to be Introduced in 8 Months
Islamabad (International News Agencies) — The Government of Pakistan has given a written assurance to the International Monetary Fund (IMF) regarding a major restructuring of the existing electricity subsidy system.
According to official sources, the subsidy on domestic electricity consumption of up to 200 units will be phased out. In its place, a new, more targeted and transparent subsidy mechanism will be introduced. The government has committed to fully implementing this new system within the next 8 months.
Officials stated that these reforms are essential to reduce the massive circular debt in the power sector, ensure subsidies reach only deserving consumers, and ease pressure on the national budget. The current cross-subsidy model will be replaced by an income and consumption-based targeted subsidy framework.
This development is part of the ongoing structural reforms under the IMF programme, aimed at achieving financial sustainability in Pakistan’s energy sector. The move is expected to generate significant fiscal savings while protecting vulnerable segments of society through better-targeted support.
