New Power and Gas Subsidy System Taking Shape Under IMF Conditions

ISLAMABAD: The government has finalised a new method for providing subsidies to electricity and gas consumers. The IMF has made it a condition that the new system for electricity consumers be enforced from 1 January.

Sources said the Power Division and the Ministry of Petroleum have prepared a new Economic and Social Registry. A steering committee headed by Ishaq Dar will decide on the implementation of the new subsidy system. A test run will be carried out before the new system is put into effect.

The IMF has set 1 January as the deadline for electricity consumers and February 2027 for gas consumers to introduce the new system. However, the government wants to keep the existing subsidy method in place until 30 June 2027.

According to sources, on the prime minister’s directions, the matter of extending relief for another six months will be raised with the IMF. The government is striving to extend subsidies by six months for consumers who use up to 200 units of electricity.

The IMF had set a target of ending subsidies for consumers using up to 200 units from 1 January 2027. If the government’s efforts succeed, the subsidy on up to 200 units of electricity will end on 1 July 2027.

The IMF has set a target of limiting electricity subsidies only to registered beneficiaries of the Benazir Income Support Programme (BISP). Limiting subsidies on low gas consumption to registered BISP beneficiaries is also a condition.