By Moaaz Manzoor

Around two million single-phase electricity consumers have registered under a QR code system launched to verify subsidy eligibility, as Pakistan’s residential and agricultural power subsidy bill has reached Rs527 billion.

According to a media brief available with Wealth Pakistan, the number of protected consumers has increased from 9.5 million in FY2022 to 21.5 million in 2026, while subsidized residential consumers now total 29.57 million, representing 86 percent of total residential users.

The annual subsidy for protected consumers rose from Rs199 billion in FY2022 to Rs423 billion in FY2025-26.

The brief put the combined residential and agricultural subsidy at Rs527 billion, including Rs249 billion funded by the government and Rs278 billion provided through cross-subsidy from other consumers.

The Power Division said the government was not withdrawing support for low-usage consumers, but wanted subsidized electricity to reach only eligible consumers. The eligibility criteria would be finalized through public consultations, while verified consumers would continue receiving the subsidy without interruption.

The ministry also cited measures that reduced power-sector costs, including Rs3.5 trillion in lifetime savings from renegotiations with Independent Power Producers (IPPs), Rs47 billion from the disposal of redundant government-owned generation companies’ machinery, Rs193 billion saved through reduction in distribution company (DISCO) losses in FY2024-25 compared with FY2023-24, and a Rs780 billion reduction in circular debt during FY2024-25.

The brief, presented by Energy Minister Awais Khan Leghari on May 31, comes amid public concern over electricity bills, subsidy targeting, circular debt, solar net billing, and future capacity planning. The figures place subsidy verification within a wider power-sector debate over who receives relief, who pays for it, and whether reforms are translating into lower consumer costs.

The current subsidy structure makes tariff targeting a central challenge, because any support that is not properly directed ultimately becomes a burden on the budget or is shifted onto other electricity users through cross-subsidy. The document shows that cross-subsidy from other consumers is larger than the government-funded portion of residential and agricultural support.

On tariffs, the brief said electricity rates declined across several consumer categories between March 2024 and May 2026. The national average rate fell from Rs53.04 per unit to Rs42.26 per unit on an all-inclusive basis, showing a 20 percent reduction.

For protected consumers using up to 200 units, the all-inclusive rate declined from Rs24.07 to Rs16.56 per unit. Industrial tariffs fell from Rs62.99 to Rs42.40 per unit, commercial tariffs from Rs76.00 to Rs70.08 per unit, and agricultural tariffs from Rs47.56 to Rs40.82 per unit.

The brief then connected tariff pressures with generation planning. It said clean energy accounted for 55 percent of the generation mix in 2025 and was targeted to reach 90 percent by 2035. The local fuel share was placed at 74 percent in 2025 and projected to increase to 96 percent by 2035, while the fuel import bill was projected to fall from $2.4 billion to $0.3 billion.

The Power Division said the national grid installed capacity, excluding K-Electric, stood at 36,397MW in 2025. It separately listed 12,296MW of net-metering solar and 18,944MW of off-grid solar.

On future capacity, the ministry defended the planned 26GW expansion, saying system planning had to account for maintenance, outages, hydrology, fuel availability, solar variation and transmission constraints.

The brief said rationalization under the Indicative System Plan (ISP) 2025 had removed more than 9,000MW of forced capacity additions, saving over $15 billion in capital investment and more than Rs400 billion annually.

Credit: INP-WealthPk