Leghari rejects reports of withdrawal of subsidy to protected power consumers

Energy Minister Awais Ahmed Khan Leghari on Sunday rejected reports suggesting that electricity subsidies for protected consumers were withdrawn, describing such claims as inaccurate and misleading.

Leghari’s remarks come amid reports last month that Pakistan had committed to the International Monetary Fund (IMF) to phase out untargeted electricity subsidies to private customers and provide future support through the Benazir Income Support Program (BISP) as part of the conditions attached to a $1.2 billion climate support loan.

Addressing a press conference on the government’s power sector reforms, Leghari said the number of protected consumers had increased from 9.5 million to 21.5 million over the past four years.

“The government does not withdraw electricity subsidy to protected consumers,” he said, adding that around 29.57 million private consumers – representing 86 percent of the total – were currently receiving subsidized electricity.

The minister said the amount of electricity subsidy had increased from Rs199 billion to Rs423b, while total subsidies worth Rs527b were given to the agriculture and household sectors.

“Eligible consumers will continue to receive uninterrupted subsidies through the QR code-based system,” he said.

Leghari said the government had put in place a registration mechanism to ensure subsidies were targeted only at deserving consumers, adding that more than two million single-phase consumers had already completed the registration process.

He maintained that reports of the end of subsidies were contrary to facts, while the government’s claims of reductions in electricity prices were correct.

Read more: Pakistan assures IMF to withdraw untargeted electricity subsidies in January

Highlighting developments in the power sector, the minister said the review of agreements with Independent Power Producers (IPPs) had generated savings of Rs 3.5 trillion.

He said reductions in losses incurred by electricity distribution companies (DISCOs) had resulted in savings of Rs193b, while circular debt had fallen by Rs780b in the financial year 2024-25.

According to Leghari, the sale of surplus machinery by JNCs had generated savings of Rs 47 billion. He said ongoing reforms had significantly reduced electricity generation and distribution costs and positive results were increasingly visible across the energy sector.

The minister said the reforms had provided direct relief to consumers, while lower subsidy allocations in the budget had eased pressure on the national exchequer. He added that the burden of cross-subsidization on industrial consumers had also been reduced.

Leghari said electricity prices had fallen across all consumer categories between March 2024 and May 2026.

“Tariffs for protected consumers have fallen by 31 per cent, while domestic consumers have benefited from a 16 per cent reduction,” he said.

He added that industrial electricity prices had fallen by 33 per cent, commercial rates by 8 per cent. and agricultural prices by 14 per cent. Consumers in Azad Jammu and Kashmir had seen electricity prices fall by 45 per cent, while tariffs for bulk consumers had been reduced by 13 per cent.

According to the minister, the average national electricity tariff had fallen by 20 per cent, which he attributed to reforms and greater dependence on domestic energy resources.

Discussing the country’s energy transition, Leghari said the share of clean energy in Pakistan’s energy mix was expected to rise from the current 55 percent. to 90 percent in 2035.

In the same period, electricity production from local resources was expected to increase from 74 per cent. to 96 per cent, while renewable energy currently accounted for 57 per cent. of the country’s energy mix, he said.

Comparing regional trends, the minister said India’s share of renewable energy stood at around 48 per cent. He emphasized that the government did not discourage the use of solar energy, but that it introduced measures aimed at improving transparency and efficiency.

“The government is not discouraging adoption of solar energy,” he said.

Also read: Fake electricity subsidy links spread on the web

Leghari said the national energy plan included 8 gigawatts of distributed solar power and the newly introduced net billing policy would not affect 90 percent of private consumers.

“No major changes have been made for residential single-phase solar users,” he said.

The minister also highlighted solarization projects in Gilgit-Baltistan and Gwadar and announced that licensing requirements for solar projects of 25 kilowatts or less had been abolished to encourage wider adoption of renewable energy.

According to Leghari, the National Electric Power Regulatory Authority (NEPRA) had approved additional facilities for small-scale solar projects at the request of the Power Division, while transparency had been improved through the digitization of the net billing system.

Read more: IMF allows Rs830b power subsidy

He also clarified that net metering had not been abolished.

“Reforms have been introduced to improve billing procedures and create a balanced framework that protects the interests of both solar consumers and other electricity users,” he said.

The minister confirmed the government’s position and said that subsidies for protected consumers would continue and were not eliminated.