Government readies new subsidy system to replace electricity and gas slabs
The government has prepared a new way of giving subsidies to electricity and gas consumers, according to sources. The IMF wants it from 1 January for power and February 2027 for gas.
- A new economic social registry has been prepared by the Power Division and the Petroleum Ministry, according to sources.
- The IMF wants the new electricity system from 1 January and the gas system from February 2027.
- The government wants the current method to continue until 30 June 2027.
The federal government has prepared a new way of giving subsidies to electricity and gas consumers, which would replace the slabs now used for both utilities, according to reports by Express News and Daily Pakistan that cite sources in Islamabad.
Sources said the Power Division and the Ministry of Petroleum have drawn up a new economic social registry for this purpose. The reports say the government is preparing to eliminate the current slabs in gas and electricity.
The International Monetary Fund wants the new system to begin for electricity consumers on 1 January. For gas consumers, it wants the new arrangement to start from February 2027.
The government, however, wants the current subsidy method to stay in place until 30 June 2027, according to the reports. The dates the lender prefers therefore fall earlier than the date the government has in mind for ending the existing method.
A steering committee headed by Deputy Prime Minister Ishaq Dar will decide how the new subsidy system is implemented. A test run will be carried out before it is brought into force.
According to sources, the question of extending relief for a further six months will be raised with the IMF on the instructions of Prime Minister Shehbaz Sharif.
The government is trying to extend the subsidy by six months for consumers who use up to 200 units of electricity. The reports do not give the amounts or rates of the new subsidy, nor do they say which households would qualify under the registry.
Why it matters for Pakistan
The change would alter how electricity and gas bills are calculated and subsidised for households across Pakistan. Consumers who use up to 200 units of electricity are the group for which the government is seeking a six-month extension of the subsidy. The timing agreed with the IMF will decide when households move from the current slabs to the new registry-based system.
