Pakistan submits roadmap to IMF, World Bank for targeted power subsidies to BISP beneficiaries

Pakistan has presented a comprehensive roadmap to the International Monetary Fund (IMF) and the World Bank, proposing targeted power subsidies for beneficiaries of the Benazir Income Support Programme (BISP), Business Recorder reported. 

After several rounds of meetings involving the Power, BISP, and Finance Divisions, and with support from the World Bank, the draft roadmap was submitted to the IMF. 

Under the new plan, the identification and verification of eligible consumers will be completed by December 31, 2025. Starting from the FY 2027 budget, the government plans to discontinue the Tariff Differential Subsidy (TDS) and allocate funds exclusively for direct subsidies to eligible consumers. The final shift to the new system is scheduled for January 2027.

This move is part of a broader energy sector reform plan focused on reducing inefficient energy consumption, curbing sector losses, and meeting Pakistan’s climate mitigation targets. The current subsidy structure, which includes blanket tariff differentials and cross-subsidies, has encouraged overconsumption, often benefiting wealthier consumers and threatening the financial sustainability of the power sector.

According to the news report, a committee led by the Power and Sustainable Energy (PASS) Division has developed the design, addressing key issues and bottlenecks. The reform of direct subsidies is also a central component of the IMF’s Resilience and Sustainability Facility (RSF) program.

The Minister for Power has reviewed the roadmap and directed the Power Planning and Management Company (PPMC) to assess the impact on consumers, with the evaluation expected by mid-May 2025. The plan will then be presented to the Prime Minister, with Cabinet approval anticipated by mid-June 2025.

The government has assured the IMF that electricity and gas subsidies will be aligned with the BISP to ensure that only low-income households benefit from the relief. A similar approach for gas subsidies is being considered, with an assessment to be completed by June 2026.

In addition to the subsidy reform, the government plans to implement Minimum Energy Performance Standards (MEPS) for appliances such as fans, refrigerators, air conditioners, and motors by June 2027.

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}