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Pakistan is preparing a major shift in how electricity and gas subsidies are distributed, with future relief likely to be linked directly to the Benazir Income Support Programme (BISP
The move aims to ensure that subsidies reach only low-income households, cutting wastage and easing pressure on the power sector’s circular debt. The plan is backed by the World Bank, which has raised concerns over inefficient energy subsidies.
According to the Bank, Pakistan spends a high share of its GDP on energy subsidies that often fail to reach deserving families. Redirecting this money toward targeted social protection could offer better support during economic and climate shocks.
Under the proposed system, only families registered and verified under BISP would qualify for power and gas subsidies. This is expected to improve transparency and impact.
The World Bank praised BISP as Pakistan’s strongest social safety net, highlighting its digital payments, data-driven targeting, and success during the Covid-19 emergency cash programme, which supported nearly 12 million families.
The report also warned of rising water stress, urging smarter resource use alongside subsidy reforms.