Pakistan's 200-unit electricity subsidy for protected consumers may continue for six more months, until June 30, 2027, after the International Monetary Fund (IMF) agreed to an extension, sources said on Saturday. The subsidy was scheduled to end on December 31, 2026. The IMF is the lender Pakistan works with under a reform programme, and the arrangement is still a proposal rather than a final decision.
What the proposed arrangement would change
According to sources, the understanding was reached in negotiations between Pakistan and the IMF last month, after the government sought further relief for consumers on the directions of Prime Minister Shehbaz Sharif. Under the proposal, the subsidy on up to 200 units would stay in place until June 30, 2027, which would let the government delay withdrawing it until July 1, 2027. The IMF had earlier set a target of ending the subsidy from January 1, 2027.
Sources also said the IMF wants the 200-unit electricity subsidy to be gradually restricted to households registered with the Benazir Income Support Programme (BISP), the government's cash transfer scheme for low-income families. A similar condition has been proposed for subsidies on low gas consumption.
Government plans for the slab system
Last month, Power Minister Awais Leghari told the Senate that the government had decided to abolish the existing electricity slab system, which charges higher rates as consumption rises, and introduce targeted subsidies. Under the current mechanism, a household using up to 200 units a month receives a subsidy of about Rs13 per unit. A household that goes even one unit over 200 is charged up to Rs33 per unit and loses protected status for the following six months.
Leghari said two options were under consideration: raising the protected threshold from 200 to 250 units, or dropping the six-month penalty so that a consumer could qualify in any month of using 200 units or less. He said the number of protected consumers had risen from around 10 million to between 20 and 25 million in two years, partly because solar users were cutting their grid use to 200 units. He said the government currently provides a subsidy of around 65 per cent to protected consumers, and that offering equal discounts to everyone under 200 units would not be appropriate. The aim, he said, is to direct relief to people below the poverty line and lower-middle-income households.
Both the extension and the new mechanism are described as proposals, so the final terms could still change.
Timeline: what has happened so far
- December 31, 2026: scheduled end date for the subsidy on up to 200 units, before the proposed extension.
- January 1, 2027: date the IMF had earlier set for ending the 200-unit electricity subsidy.
- June 30, 2027: proposed new end date for the subsidy under the understanding.
- July 1, 2027: date from which the government could withdraw the subsidy under the proposed arrangement.
Aasan alfaaz mein
Sources ke mutabiq IMF 200 unit tak bijli istemal karne wale protected consumers ki subsidy chhe mahine badhane par razi hua hai, yani ye June 30, 2027 tak jari rah sakti hai. Abhi ye sirf proposal hai aur hukumat slab system khatam karne par bhi ghor kar rahi hai. IMF chahta hai ke ye subsidy aahista aahista sirf BISP mein registered gharanon tak mehdood ho. Agar aap ka bil 200 unit ke andar hai to ye relief kuch aur waqt tak mil sakta hai, lekin final faisle ka intezar karein.
