Pakistan Plans BISP-Linked Electricity Subsidies From January 2027

Prime Minister Shehbaz Sharif has established a high-level ministerial committee to formulate a plan for replacing broad-based electricity subsidies with targeted financial assistance for eligible households through the Benazir Income Support Programme (BISP).

According to a news report, the committee, led by Planning Minister Ahsan Iqbal, must submit its recommendations within two months of October 18, 2026. The proposed reforms are scheduled to take effect from January 1, 2027.

The government aims to gradually replace the existing system of general electricity subsidies with a targeted model that directs financial support towards households that meet specific income and eligibility requirements.

The proposed changes could also affect consumers who currently receive subsidised electricity by using up to 200 units per month. Under the new approach, eligibility may increasingly depend on a household's financial circumstances rather than electricity consumption alone.

The committee will examine the existing subsidy framework, evaluate its impact on public finances and recommend a phased transition towards targeted assistance.

Another key responsibility will be to assess how electricity subsidies can be linked with BISP's beneficiary database. This will involve examining household identification, eligibility verification and coordination among the relevant government departments.

However, the government has not yet finalised the eligibility requirements or administrative procedures for the proposed system.

Pakistan's total subsidy expenditure is estimated at Rs1.091 trillion, including Rs830 billion earmarked for the power sector in fiscal year 2026–27.

The planned restructuring is intended to ease pressure on government finances while ensuring that vulnerable households continue to receive financial support and are protected from sudden increases in electricity bills.

The initiative is also connected to Pakistan's fiscal consolidation commitments under programmes involving the International Monetary Fund (IMF) and the World Bank.

The committee comprises federal ministers and senior representatives from the Finance and Power Divisions, the National Database and Registration Authority (NADRA), the Prime Minister's Office and the energy sector.

Its recommendations will help determine the eligibility criteria, implementation timeline and protective measures governing the proposed changes to electricity subsidies.