Pakistan has told the International Monetary Fund (IMF) that the electricity subsidy for households using up to 200 units per month will be stopped from January 2027. This decision is part of Pakistan’s plan to reduce financial pressure on the power sector and make the subsidy system work better.
Instead of giving subsidy to all 200-unit consumers, the government will now give financial help only to poor and deserving families through the Benazir Income Support Programme (BISP). This new system will make sure that the money goes to people who actually need it and is not wasted on those who can afford to pay full bills.
The government has also pointed out that many people have been misusing the current subsidy. Some consumers have reportedly been using multiple electricity meters or other tricks to keep their usage below 200 units so they can get cheaper rates even though they actually use more electricity. The new system is meant to stop this kind of misuse and make the process fairer for everyone.
This change is part of bigger IMF-backed reforms to fix Pakistan’s power sector, collect more revenue, and reduce circular debt. Along with the subsidy changes, the government also plans to introduce digital monitoring systems, new tariff structures, and other measures to make the energy sector more transparent and stable in the long run.
