ISLAMABAD: Pakistan has accelerated reforms in the energy sector to fulfil the International Monetary Fund’s (IMF) conditions, with plans to abolish the existing tariff slabs and cross-subsidy system for electricity and gas consumers. According to sources, the government plans to introduce a new electricity subsidy framework in January 2027, while a revised subsidy system for gas consumers is expected to take effect from July 1, 2027. The government has decided to restrict electricity and gas subsidies to deserving and low-income households. Sources said the Power Division, with support from the World Bank, had begun work on developing a socioeconomic registry to identify eligible consumers. The registration process is targeted for completion by November. Following verification, consumer data will be linked to the records of the Benazir Income Support Program (BISP), enabling authorities to identify households eligible for electricity and gas subsidies through the new registry. According to sources, the government is preparing to abolish the tariff differential subsidy (TDS) and cross-subsidy system in the electricity sector by January 2027. Gas consumers will be linked to the socioeconomic registry from July 1, 2027, under the proposed reforms. Meanwhile, electricity distribution companies (DISCOs) have filed applications for base tariff adjustments, sources said. The proposed changes to the subsidy framework are aimed at easing pressure from the energy sector’s circular debt and improving the targeting of government assistance to low-income consumers. Sources added that the International Monetary Fund had also been briefed on preparations for the privatization of electricity distribution companies and the planned reforms in the power sector.
