Pakistan has informed the International Monetary Fund that it plans to introduce a major change in its electricity subsidy system. The current subsidy given to all households using up to 200 electricity units per month will be removed and replaced with a targeted system starting from January 2027.
Currently, low consumption electricity users receive subsidised power rates automatically.
However, the government says the current system is being misused. Some households install multiple electricity meters and keep the usage on each meter below 200 units to receive extra subsidies.
Subsidies will only be provided to deserving and low income families instead of all consumers below the usage limit. The government plans to identify eligible households using data from the Benazir Income Support Programme and the National Socio Economic Registry (NSER).
Authorities believe this step will ensure that financial support reaches people who genuinely need help with electricity bills and limit the misuse.
Additionally, Pakistan is developing a mechanism to connect electricity consumer records with social welfare databases, with the assistance of World Bank, in order to implement the new system.
Moreover, the government is planning to expand Punjab’s digital water tax collection system, known as the e-Aabiana system, to other provinces including Sindh, Khyber Pakhtunkhwa, and Balochistan . At the same time, reforms are being considered to adjust irrigation water charges according to maintenance and operational costs.
Officials say Pakistan is close to receiving the second $200 million installment under the Resilience and Sustainability Facility. The IMF Executive Board is expected to discuss the matter in a meeting in Washington on May 8.
Overall, the proposed electricity subsidy reforms are part of Pakistan’s efforts to reduce financial pressure on the economy and improve transparency.
In other news, Peshawar Electric Supply Company (PESCO) has launched a QR code-based system to streamline online electricity bill payments, as stated by a PESCO spokesperson on Monday.
The spokesperson indicated that QR codes have been added into electricity bills, allowing Peshawar consumers to conveniently settle their payments from home by simply scanning the code.
Consumers of PESCO can use any banking application, along with mobile wallets such as JazzCash and Easypaisa, to finalise their payments using the QR code feature.
