Power Division refutes power sector claims, cites lower tariffs, higher subsidies

June 01, 2026 (MLN): Pakistan’s electricity subsidies for protected consumers have more than doubled since 2022, reaching Rs423 billion in FY 2025–26, while the national average all-inclusive tariffs have been cut by 20% across all consumer categories, the Ministry of Energy (Power Division) said, pushing back against what it described as widespread misinformation about the country’s power sector.

Awais Khan Leghari, Minister for Energy (Power Division), presented a media brief on May 31 addressing five key claims circulating in the media, each of which he said was factually incorrect.

Subsidies

The ministry said the number of protected consumers those receiving electricity at subsidised rates  has grown from 9.5 million in FY 2022 to 21.5 million in 2026, representing 86% of all 34.2 million residential consumers.

Of the total Rs527 billion in residential and agriculture subsidies, 249 billion is government-funded while PKR 278 billion is cross-subsidised by other consumers.

To ensure the subsidy reaches only eligible consumers, the government has launched a QR code registration system. Two million single-phase consumers have already registered, with eligibility criteria to be determined through public consultations.

Electricity tariffs

The ministry said electricity prices have fallen across all consumer categories between March 2024 and May 2026. The largest reduction was recorded in AJK (45%), followed by industrial consumers (33%) and protected consumers using up to 200 units (31%).

At the national level, the average all-inclusive rate fell by 20%, from PKR 53.04 per unit to PKR 42.26 per unit.

The savings come from a range of reforms, including PKR 3.5 trillion in lifetime savings from renegotiated Independent Power Producer (IPP) contracts, a PKR 780 billion reduction in circular debt in FY 2024–25, and PKR 193 billion in savings from reduced distribution company losses.

Energy mix

On Pakistan’s energy mix, the ministry said 55% of power generation in 2025 already comes from clean sources, with a target of 90% by 2035.

The country’s fuel import bill is projected to fall from $2.4 billion today to $0.3 billion by 2035, as locally-sourced hydel, solar, wind and nuclear capacity expands. Pakistan’s current 57% renewable share is comparable to Turkey and higher than India’s 48%.

Capacity additions

The ministry rejected claims that the government is adding 26,000 MW of new capacity while existing plants sit idle. It said the national grid’s installed capacity stands at 36,397 MW  not the 46,000 MW cited in some reports. It added that available capacity is always lower than installed capacity due to maintenance, seasonal factors, fuel availability and transmission constraints, a norm that applies in all countries.

It said Pakistan’s capacity-to-peak-demand ratio of 2.1x already mirrors that of Turkey and Brazil, both of which maintain around the same ratio.

The ISP 2025 rationalization plan has already removed more than 9,000 MW of forced capacity additions, saving more than $15 billion in capital investment and over PKR 400 billion per year in consumer costs. The 26,000 MW in ISP 2026 is dominated by least-cost clean energy sources.

Solar energy

The ministry said the government is not discouraging solar energy, but regulating it more transparently.

It said 8 GW of distributed solar has been included in the national electricity plan, 90% of consumers all single-phase households are unaffected by the shift from net metering to net billing, and licensing fees for systems of 25 kW and below have been removed.

The shift to net billing applies only to three-phase commercial and industrial consumers and is aimed at ensuring solar credit payouts do not burden non-solar consumers.

Summary of findings

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