- October 2, 2026
- Posted by: Tresmark
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The government and the International Monetary Fund (IMF) are expected to finalise next week a mechanism to replace electricity tariff subsidies for low-income consumers with direct cash transfers through the Benazir Income Support Programme (BISP).
The proposed system would shift support from subsidised electricity tariffs to direct assistance for eligible households, with discussions focused on identifying beneficiaries and establishing a mechanism for transferring funds.
The move is part of broader energy-sector reforms aimed at making subsidies more targeted, reducing pricing distortions and containing circular debt.
The experience from the power sector could also serve as a framework for shifting gas subsidies towards direct cash assistance. However, sources said the gas sector is not yet ready for immediate implementation due to gaps in consumer data and ownership records.
The proposed gas-sector reforms are also aimed at reducing cross-subsidies and addressing the gas circular debt, which has reportedly reached around Rs3.6 trillion.
The IMF has advised further consultations to develop a workable mechanism for targeted gas subsidies rather than implementing the system before the required data and administrative framework are in place.
Sources also said the IMF acknowledged Pakistan’s handling of fuel supplies during the six-month US-Iran conflict, noting that the country avoided major disruptions without placing an additional burden on the national budget.
