ISLAMABAD (Kashmir English): In a significant policy shift, the government has decided to phase out subsidies for low electricity users, especially those consuming up to 200 units per month. This move is expected to impact millions of households across Pakistan who currently benefit from discounted electricity rates.
The announcement was made during a Public Accounts Committee (PAC) meeting chaired by Junaid Akbar Khan, where Power Division Secretary Dr. Fakhar Alam Irfan revealed that the protected consumer category will be eliminated by 2027.
According to Dr. Irfan, the number of protected electricity users has risen from 11 million to 18 million, and these users make up nearly 58% of the total consumers in the country. Currently, those consuming up to 200 units receive 60 to 70 percent subsidies, which the government now plans to gradually reduce over the next 18 months.
He added that this change is part of the broader effort to reduce subsidies and make energy pricing more sustainable. “By mid-2027, subsidies on electricity will be completely withdrawn,” he stated.
Pakistan has surplus of energy
Meanwhile, Pakistan has a surplus of electricity, and officials are exploring how best to use it. Two key proposals are under consideration: one suggests supplying cheap electricity to existing industries, while the other focuses on providing low-cost power to new industrial setups. These measures are expected to boost industrial growth and reduce production costs.
Dr. Irfan also mentioned that the World Bank has appreciated these proposals, and discussions are currently underway with the International Monetary Fund (IMF). However, the IMF has not yet given formal approval.
The government’s decision to end subsidies for 200-unit energy consumers is likely to affect middle and lower-income families the most. Experts believe that while subsidy reforms may improve the economy in the long run, they could lead to higher electricity bills in the short term.
As the government moves forward with its energy reforms, citizens are advised to prepare for gradual increases in electricity costs, especially those who previously benefited from protection under the current system.
