Pakistan’s power sector has entered another decisive round of structural reform. Tariff rationalisation, fixed charges tied to authorised load, and subsidy restructuring, reinforced by the International Monetary Fund’s (IMF) call to replace the existing tariff differential and cross-subsidy regime with targeted support for low-income consumers by 2027, are now at the centre of the policy debate.
The direction is fiscally necessary, but its success will depend on whether the policymakers can distinguish genuine vulnerability from shifting consumption patterns and tariff distortions, and design relief around actual energy poverty.
That remains the central weakness in the present reform approach. The country still lacks a formal national definition of energy poverty, turning what is essentially a multidimensional deprivation into a narrow billing classification problem. As a result, subsidy design continues to misread vulnerability, even though millions face it daily through unaffordable bills and unreliable supply that place pressure on wellbeing and living standards.
Policy continues to rely heavily on consumption slabs to determine eligibility, even though electricity use is an unreliable indicator of need. Low consumption often reflects hidden deprivation, when households suppress essential use because they cannot afford it.
