Power sector reforms save trillions as subsidies continue for protected users: Leghari

• Energy Minister says protected consumers increase from 9.5 million to 21.5 million over past four years

• Claims Rs423b electricity subsidy and Rs527b support package continue for domestic, agricultural sectors

• Says IPP agreement review generates Rs3.5 trillion in savings; circular debt falls by Rs780b

• Says electricity tariffs decline across all consumer categories, with average rates down 20pc since March 2024

• Says clean energy share projected to reach 90pc by 2035 as government expands solar and local power generation initiatives

 ISLAMABAD: Federal Minister for Energy Owais Leghari on Sunday dismissed reports suggesting the withdrawal of electricity subsidies as misleading and inaccurate, reaffirming that the government will continue providing relief to protected consumers and highlighting major gains from ongoing power sector reforms.

Addressing the government's energy sector reform agenda, Leghari said the number of protected consumers has increased from 9.5 million to 21.5 million over the past four years, while approximately 29.57 million domestic consumers — representing 86 per cent of the total — are currently benefiting from subsidised electricity.

“The number of protected consumers has increased from 9.5 million to 21.5 million over the past four years and approximately 29.57 million domestic consumers, representing 86 percent of the total, are currently receiving subsidized electricity,” he said.

The minister noted that electricity subsidies have risen substantially, from Rs199 billion to Rs423 billion, while a cumulative subsidy of Rs527 billion is being provided to the agricultural and domestic sectors.

He stressed that eligible consumers would continue receiving uninterrupted subsidies through the QR code-based verification system, adding that the government has introduced a registration mechanism to ensure that assistance reaches only deserving beneficiaries.

According to Leghari, more than two million single-phase consumers have already completed the registration process. He reiterated that reports regarding the discontinuation of subsidies were contrary to facts, while the government's claims regarding reductions in electricity prices were fully supported by data.

Highlighting progress in the power sector, the minister said the review and renegotiation of agreements with Independent Power Producers (IPPs) had generated savings of Rs3.5 trillion.

He added that efforts to reduce losses in power distribution companies (DISCOs) resulted in savings of Rs193 billion, while circular debt declined by Rs780 billion during fiscal year 2024-25.

Leghari further said the sale of surplus machinery of JNCs generated savings of Rs47 billion, adding that ongoing reforms had significantly reduced electricity generation and distribution costs, with their benefits increasingly visible across the sector.

The minister maintained that power sector reforms had translated into tangible relief for consumers. He said lower subsidy allocations in the budget had reduced pressure on the national exchequer, while the burden of cross-subsidies on industrial consumers had also been eased.

Providing details of tariff reductions, Leghari said electricity prices had declined across all consumer categories between March 2024 and May 2026.

According to the minister, tariffs for protected consumers fell by 31 per cent, while domestic consumers received a 16 per cent reduction. Industrial electricity rates declined by 33 per cent, commercial tariffs by 8 per cent, and agricultural consumers benefited from a 14 per cent reduction.

Consumers in Azad Jammu and Kashmir witnessed the largest decline, with electricity tariffs falling by 45 per cent, he added.

Leghari further said tariffs for bulk consumers had been reduced by 13 per cent, while the average electricity tariff nationwide had declined by 20 per cent. He attributed the reductions to structural reforms and a growing reliance on domestic energy resources.

Discussing Pakistan's long-term energy transition, the minister said the share of clean energy in the national power mix is expected to rise from the current 55 per cent to 90 per cent by 2035.

During the same period, electricity generation from local resources is projected to increase from 74 per cent to 96 per cent. He noted that renewable energy currently accounts for 57 per cent of Pakistan's overall energy mix.

Drawing a regional comparison, Leghari said India's renewable energy share stands at around 48 per cent.

He stressed that the government is not discouraging the adoption of solar energy but is introducing measures aimed at improving transparency, sustainability and efficiency within the electricity system.

The minister said the National Energy Plan envisages 8 gigawatts (GW) of distributed solar energy and clarified that the recently introduced net billing policy would not affect 90 per cent of domestic consumers, as no major changes had been made for single-phase residential solar users.

He also highlighted ongoing solarisation projects in Gilgit-Baltistan and Gwadar and announced that licensing requirements for solar projects of up to 25 kilowatts (kW) had been abolished to encourage wider adoption of renewable energy technologies.

According to Leghari, the National Electric Power Regulatory Authority (NEPRA) has approved additional facilities for small-scale solar projects at the request of the Power Division, while digitisation of the net billing system has enhanced transparency and efficiency.

The minister clarified that net metering has not been abolished. Instead, reforms have been introduced to improve billing mechanisms and establish a balanced framework that safeguards the interests of both solar consumers and other electricity users.

Reaffirming the government's commitment, Leghari said electricity subsidies for protected consumers would continue and were not being withdrawn under any reform initiative.