Pakistan has informed the IMF that the electricity subsidy for households using up to 200 units per month will end from January 2027 as part of broader economic reforms aimed at reducing pressure on the power sector.
The government plans to replace the current subsidy system with a targeted model linked to the Benazir Income Support Programme (BISP), ensuring financial assistance reaches low-income and deserving families instead of all consumers under the 200-unit category.
Officials said the new system will improve transparency and reduce misuse, as some consumers were allegedly using multiple electricity meters to remain within the subsidized limit despite higher actual power consumption. The revised policy is expected to ensure fair distribution of subsidies and better management of public funds.