Leghari rejects reports of withdrawal of subsidies for protected energy consumers

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Ahmed Khan Leghari on Sunday rejected reports suggesting that electricity subsidies for protected consumers were being withdrawn, describing such claims as inaccurate and misleading.

Leghari’s comments come against the backdrop of reports last month that Pakistan had committed to the International Monetary Fund (IMF) to gradually end non-targeted electricity subsidies for residential consumers 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.

At a press conference on the government’s reforms in the energy sector, Leghari said the number of protected consumers had increased from 9.5 million to 21.5 million in the last four years.

“The government is not withdrawing electricity subsidies for protected consumers,” he said, adding that around 29.57 million domestic consumers – accounting for 86 percent of the total – were currently receiving subsidized electricity.

The minister said the volume of electricity subsidies had increased from Rs 199 billion to Rs 423 billion, while total subsidies worth Rs 527 billion were being provided to the agricultural and domestic sectors.

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

Leghari said the government had introduced a registration mechanism to ensure that subsidies went only to deserving consumers, adding that more than two million single-phase consumers had already completed the registration process.

He argued that reports about the discontinuation of subsidies were contrary to facts, while the government’s claims about reductions in electricity prices were accurate.

Read more: Pakistan assures IMF that it will withdraw non-specific energy subsidies in January

Highlighting the 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.

It said reductions in losses incurred by power distribution companies (DISCOs) had resulted in savings of Rs 193 billion, while circular debt had decreased by Rs 780 billion during fiscal year 2024-25.

According to Leghari, the sale of surplus machinery by the JNCs had generated savings of Rs 47 billion. He said ongoing reforms had significantly reduced electricity generation and distribution costs, with positive results becoming 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 treasury. He added that the burden of cross-subsidies on industrial consumers had also been reduced.

Providing details on the tariff reductions, Leghari said electricity prices had decreased across all categories of consumers between March 2024 and May 2026.

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

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

According to the minister, the average electricity rate across the country had fallen by 20 percent, which he attributed to the reforms and a greater dependence on national 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 by 2035.

Over the same period, electricity generation from local resources is projected to increase from 74 percent to 96 percent, while renewable energy currently accounts for 57 percent of the country’s energy mix, it said.

Comparing regional trends, the minister said India’s share of renewable energy stood at around 48 per cent. He stressed that the government was not discouraging the adoption of solar energy, but was instead introducing measures aimed at improving transparency and efficiency.

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

Read also: Fake links about electricity subsidies spread on the Internet

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 domestic consumers.

“No major changes have been made for single-phase residential 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) approved additional installations for small-scale solar projects at the request of the Power Division, while transparency was improved through digitization of the net billing system.

Read more: IMF allows energy subsidies of 830 billion rupees

He also clarified that net metering has not been abolished.

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

Reaffirming the government’s position, the minister said that subsidies to protected consumers will continue and will not be eliminated.