Energy minister clarifies govt not withdrawing electricity subsidies for protected consumers 

ISLAMABAD: Pakistan’s electricity subsidy burden has climbed to ₨527 billion, while the number of protected electricity consumers has surged to 21.5 million households, Energy Minister Awais Leghari revealed on Sunday.

Addressing a press conference, the minister said reports claiming that subsidies for protected consumers are being withdrawn were "factually incorrect" and added that reforms are focused on tightening eligibility and improving targeting rather than reducing support.

Official figures show that the number of protected consumers has increased sharply from 9.5 million to 21.5 million over the past four years, with around 29.57 million domestic consumers, about 86% of total users, currently receiving electricity subsidies.

The total subsidy outlay has risen from ₨199 billion to ₨423 billion for electricity alone, while combined support for the agriculture and domestic sectors now stands at ₨527 billion, highlighting continued fiscal pressure on the power sector.

To improve subsidy delivery, the government has introduced a QR code-based verification and registration system, under which more than 2 million single-phase consumers have already completed registration, according to the minister.

Awais Leghari dismissed speculation about subsidy cuts, saying the government remains committed to providing relief to eligible consumers while addressing inefficiencies in the system.

The minister also cited broader power sector reforms, including ₨3.5 trillion in savings from Independent Power Producer (IPP) contract revisions, ₨193 billion in savings from reductions in distribution company (DISCO) losses, and a ₨780 billion reduction in circular debt during FY2024-25. He added that the optimisation of Generation Company (GENCO) assets had generated savings of ₨47 billion.

He said electricity tariffs had declined across all major consumer categories between March 2024 and May 2026, including a 31% reduction for protected consumers, 16% for domestic consumers, 33% for industrial users, 8% for commercial users, 14% for agricultural consumers and 13% for bulk consumers. The national average tariff has fallen by 20%, he added.

Discussing the energy transition, the minister said Pakistan is increasing its reliance on domestic and cleaner energy sources, with the share of clean energy projected to reach 90% by 2035, compared with 55% at present. Dependence on local energy resources is also expected to rise from 74% to 96%.

He added that renewable energy currently accounts for 57% of Pakistan's energy mix, compared with around 48% in India, and said solar expansion would continue under revised policies aimed at improving transparency.

The minister clarified that net metering reforms would not affect around 90% of domestic consumers, while small-scale solar projects of up to 25 kilowatts (kW) have been exempted from licensing requirements.

He concluded that subsidies for protected consumers are not being withdrawn, but that the system is being restructured to improve fairness, transparency and fiscal sustainability.