Driven by severe fiscal constraints and obligations to international financial institutions, Prime Minister Shehbaz Sharif has constituted a high-level ministerial committee to dismantle Pakistan’s broad-based electricity subsidies and transition toward a strictly “targeted support mechanism.”
The macroeconomic restructuring aims to rein in a massive national subsidy bill currently estimated at Rs1.091 trillion, a figure heavily dominated by an Rs830 billion power-sector allocation for the 2026-27 fiscal year. The escalating sovereign commitments have placed unsustainable pressure on the federal budget, necessitating immediate rationalization of public expenditure.
The sweeping overhaul will be spearheaded by Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal, who has been appointed to chair the newly formed committee. The initiative integrates high-level political figures, bureaucratic heads, and energy experts to rapidly engineer an institutional framework linking power subsidies directly to the Benazir Income Support Programme (BISP).
| Power Subsidy Restructuring Committee | Core Mandate & Designation |
| Ahsan Iqbal (Chairperson) | Minister for Planning, Development and Special Initiatives |
| Rana Sanaullah Khan, Sardar Awais Ahmad Khan Leghari, Dr Musaddak Malik, Ahad Khan Cheema, Shaza Fatima Khawaja, Attaullah Tarar | Federal Committee Members |
| Muhammad Ali, Bilal Azhar Kayani, Lt Gen Muhammad Zafar Iqbal (Retd), Talha Barki, Dr Sohail Anwar Ch | Appointed Subject Experts & Members |
| Secretary Finance, Secretary Power, Chairman NADRA | Institutional & Administrative Leadership |
| Head of GRU, GRU-Nominated Energy Expert | Prime Minister’s Office Representation |
The committee is officially mandated to submit actionable recommendations within two months of its formation on October 18, 2026. Federal authorities are targeting an aggressive rollout timeline, with the proposed reforms envisaged to take statutory effect from January 1, 2027.
The structural shift will forcefully pivot the state away from indiscriminate, consumption-based tariff relief. Currently, the government absorbs the cost of blanket electricity subsidies, including untargeted financial relief for domestic consumers utilizing up to 200 units per month.
“The proposed reforms are aimed at moving away from broad-based electricity subsidies towards a targeted mechanism under which financial assistance would be provided to deserving consumers, particularly low-income households.”
Under the revised strategy, future utility eligibility will increasingly be determined through rigorous, targeted assessments of exact household financial circumstances rather than basic electricity consumption metrics alone. This requires the development of a highly reliable beneficiary registry and advanced verification protocols, relying heavily on NADRA’s data infrastructure and joint coordination between the Power Division, the Finance Division, and BISP.
The committee must also navigate the fiscal implications of dismantling the existing subsidy structure. The objective is to construct a phased implementation plan that contains the government’s financial hemorrhage while actively shielding vulnerable demographics from an abrupt and destabilizing spike in electricity billing.
This fiscal rationalization strictly aligns with Pakistan’s macroeconomic consolidation commitments mandated by the International Monetary Fund (IMF) and the World Bank. The committee will examine the existing administrative framework, identify critical shortcomings in targeting efficiency, and finalize the pacing of the gradual withdrawal of untargeted public assistance.