ISLAMABAD, November 8, 2026: The federal government has developed a new subsidy mechanism for electricity and gas consumers that could replace the existing consumption-based slab system with targeted financial assistance linked to households’ economic and social status, according to sources.
The Power Division and Ministry of Petroleum have reportedly prepared a new socioeconomic registry to identify consumers eligible for subsidies under the proposed system.
The move comes as the International Monetary Fund (IMF) is seeking the introduction of the revised subsidy framework for electricity consumers from January 1, 2027, and gas consumers from February 2027.
However, the government wants to retain the existing subsidy arrangements until June 30, 2027, to continue providing relief to eligible households.
New subsidy system awaits government approval
According to sources, a steering committee headed by Deputy Prime Minister Ishaq Dar will decide on the implementation of the proposed subsidy mechanism.
Authorities are expected to conduct a trial run before introducing the new system to assess its effectiveness and identify potential implementation issues.
The proposed socioeconomic registry is intended to help determine subsidy eligibility using household economic circumstances rather than relying primarily on electricity or gas consumption slabs.
However, the government has not yet announced the final eligibility criteria or confirmed when the existing slab structure will be replaced.
Government seeks extension for electricity consumers
Sources said Prime Minister Shehbaz Sharif has directed officials to raise the issue of extending existing subsidy arrangements with the IMF.
The government is particularly seeking a six-month extension of subsidies for electricity consumers using up to 200 units per month.
Under the reported proposal, the current relief arrangements would remain in place until the end of the 2026–27 financial year.
The IMF, however, has reportedly linked the introduction of the revised framework to earlier implementation deadlines.
The discussions will determine whether the government can continue the existing relief mechanism while preparing to shift towards targeted subsidies.
What the proposed changes mean for consumers
The proposed changes could alter how households qualify for subsidised electricity and gas tariffs.
Under the existing approach, electricity consumption levels play a major role in determining eligibility for certain subsidised tariff categories.
The proposed system would instead use socioeconomic information to identify households requiring financial support.
For consumers, the immediate position remains unchanged, as the proposed replacement of the existing slabs has not yet received final implementation approval.
Further details about eligibility, subsidy amounts and the transition process are expected once the steering committee finalises its recommendations.