The government is moving to gradually eliminate the protected electricity consumer category, a senior official informed lawmakers on Tuesday. This change aims to replace existing subsidized tariffs with direct cash transfers for low-income households, starting in 2027.
During a briefing to the Public Accounts Committee (PAC), Dr. Muhammad Fakhr Alam Irfan, the Power Division Secretary, told members that currently, 58% of electricity consumers in Pakistan utilize 200 units or less per month and receive up to a 60% subsidy on their bills. He also noted that the number of protected consumers has increased by 5 million over the past few years.
He added that eligibility for future subsidies will be determined through the Benazir Income Support Programme (BISP) database, signaling a shift towards more targeted support for the most vulnerable segments of society.
The secretary also presented two proposals to the International Monetary Fund (IMF) aimed at increasing electricity supply at reduced rates. The first proposal seeks to allow existing industries to access electricity at global rates for second-shift operations. The second suggests concessional tariffs for new industries, cryptocurrency ventures, and data mining operations.
Discussions with the IMF are ongoing, and a formal response has not yet been received. If approved, these proposals will be submitted to the federal cabinet for ratification.
During the meeting, PTI leader Umar Ayub Khan highlighted that the previous government had introduced a similar facility during the COVID-19 pandemic. He urged the current administration to make independent decisions rather than awaiting IMF directives.
PPP MNA Shazia Marri questioned the persistence of load-shedding despite surplus electricity generation, specifically mentioning that Sanghar experiences outages lasting up to 14 hours. She also alleged that pressure from vested interests had delayed power generation from Thar coal for years and conceded that earlier opposition to the Sahiwal coal project had now been proven misguided.
Irfan confirmed that electricity is currently being produced from Thar coal, and efforts are underway to expand its utilization. Plans include the construction of a railway line to transport Thar coal to other power plants, and the Jamshoro power station is also being converted to use Thar coal.
He further stated that no new power plants will be established using imported fuel over the next ten years. The government’s energy policy will prioritize investments in hydropower, indigenous coal-based generation, and the promotion of renewable energy sources.
The power secretary concluded by saying that steps are also being taken to reduce the cross-subsidy burden on industrial and commercial users, with the goal of creating a more balanced and equitable power tariff structure.
