Pakistan plans targeted power subsidy overhaul for low-usage consumers

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Pakistan power subsidy overhaul

Highlights

Pakistan's government is overhauling the power tariff structure, replacing blanket subsidies with targeted support for low-usage consumers over the next six months.
Power Minister Awais Leghari confirms the current protected-consumer mechanism, granting concessions for all users up to 200 units, will be reviewed for greater equity.
The new plan aims to end subsidies to financially stable or solar-equipped households within the 20 million-strong under-200 units segment, focusing relief only on deserving users.

Tariff reform plan and policy review

As reported by Business Recorder, Power Minister Awais Leghari tells the Upper House of Parliament that the government is making speedy progress on replacing the existing billing system that penalises consumers for the next six months if their usage goes even one unit above 200 units.

Leghari says the current slab-based structure places an excessive burden on some consumers and is being reviewed through a targeted subsidy model. He says the present protected-consumer mechanism grants concessions to all users up to 200 units, but that blanket approach is no longer seen as equitable.

The minister raises the issue while responding to a calling attention notice moved by Abid Sher Ali of Pakistan Muslim League Nawaz over incremental electricity tariffs and DISCO billing practices. He also says the option of increasing the subsidised slab threshold from 200 units to 250 units remains under consideration.

Impact on subsidy distribution

Leghari says many financially stable consumers are benefiting from the current system despite not needing support, including some households with solar systems that keep grid consumption below 200 units. In his view, that undermines the purpose of relief designed for vulnerable users.

He says the number of consumers using up to 200 units a month has reached 20 million, with most of them using solar systems. The planned shift would abolish blanket relief for all consumers in that category and redirect support only to households the government considers deserving.

Our earlier report on Pakistan’s push to expand priority-sector lending detailed the government’s plan to widen credit access for households, farmers and SMEs through clearer targets and reforms to banking processes. It outlined goals to raise farm and SME credit by June 2027, speed up housing-loan approvals, and link banks’ access to incentives with stronger lending performance, alongside risk-sharing and public-private partnership measures.

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