The Power Division has finalized a major electricity subsidy reform plan aimed at ending blanket subsidies and providing financial relief only to low-income households identified through the Benazir Income Support Programme (BISP).

According to official sources, the new framework will require most electricity consumers to pay the full cost of power. Subsidies will be reserved exclusively for financially vulnerable households listed in the BISP database. Authorities have already begun coordinating with BISP to integrate electricity consumer records and ensure accurate identification of eligible beneficiaries.

The reform is designed to eliminate cross-subsidies, which previously shifted financial burdens onto other consumers and sectors. Officials say the new system will ensure that government support reaches only deserving families without increasing costs for others.

The plan will be presented during upcoming negotiations with the International Monetary Fund (IMF), as Pakistan continues discussions on tariff restructuring and fiscal sustainability under its ongoing financial assistance programs.

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IMF officials have emphasized that tariff reforms must avoid placing excessive financial pressure on low- and middle-income households.

Meanwhile, the Petroleum Division is also reviewing subsidy reforms in the gas sector. Cross-subsidies in gas currently total around Rs 225 billion and are expected to be addressed in the upcoming federal budget.

Economists believe targeted subsidies will improve fiscal discipline, reduce financial losses, and protect vulnerable consumers while supporting Pakistan’s broader economic reform agenda.