Pakistan has officially informed the International Monetary Fund (IMF) that it will introduce significant changes to its electricity subsidy system, marking a major shift in how power relief is provided to consumers.

According to reports, the government plans to phase out the general subsidy currently available to all consumers using up to 200 units of electricity per month. Instead, a new targeted subsidy framework will be implemented over the next eight months.

Under the proposed system, only eligible and deserving households will receive electricity subsidies, with the aim of improving efficiency and reducing misuse of government support.

Officials said the targeted subsidy model is expected to become fully operational by January 2027. The government intends to use data from the Benazir Income Support Programme (BISP) to identify deserving families and ensure that financial assistance reaches the right beneficiaries.

In addition, authorities are working to integrate electricity consumer records with the National Socio-Economic Registry (NSER). The World Bank is also expected to provide technical assistance for the implementation of the reform plan.

The government is also considering outsourcing parts of the subsidy distribution system to an external company to improve transparency and efficiency.

Officials noted that the current system has been misused in some cases, where consumers install multiple electricity meters to keep usage under the 200-unit threshold and gain additional subsidies.

The new reforms aim to discourage such practices and ensure that subsidies are strictly limited to genuinely deserving households, improving fairness and reducing fiscal pressure on the energy sector.