Overview
- The government agreed with the IMF to cap next year’s power subsidies at Rs830 billion, with no approval for fuel subsidies.
- The subsidy will cover tariff gaps for power distributors and K‑Electric, clear FATA arrears and farm tube‑well support, and offset losses from theft and weak bill recovery.
- A new benchmark requires a base tariff rebasing on January 15, 2027, and NEPRA will keep monthly fuel and quarterly tariff changes on schedule.
- Circular debt is set to rise by about Rs400 billion this year and Rs300 billion next year, with a plan to push new additions to zero by fiscal year 2031.
- The reform plan delays selling three power distributors to early 2027, applies net billing to new rooftop solar users, advances a new energy infrastructure company, and sets June and December 2026 deadlines to settle with IPPs and resolve K‑Electric arrears.