ISLAMABAD: The federal government has officially ended all subsidies for Utility Stores and the Ramazan Relief Package in the fiscal year 2025–26 budget.
This move reflects a broader reduction in overall subsidies, which have been slashed by Rs. 190 billion compared to the previous year.
As per official figures, the total subsidy allocation now stands at Rs. 1,186 billion, down from Rs. 1,376 billion in FY 2024–25.
Key Consumer Subsidies Eliminated
Major cuts include the complete withdrawal of financial support for Utility Stores and agricultural tube wells.
No budget has been assigned to the Prime Minister’s Ramazan Relief Package this year.
Fertilizer subsidies have also been removed, though Rs. 7 billion has been reserved for urea imports.
Support for solar tube wells in Balochistan and mark-up subsidies on Zarai Taraqiati Bank loans have also been discontinued.
Sector-Wise Allocations and Cuts
Despite these reductions, the power sector remains the top recipient of subsidies, getting Rs. 1,036 billion, though even this is Rs. 154 billion less than last year.
K-Electric will receive Rs. 125 billion as a tariff differential subsidy.
Industrial subsidies have been cut significantly to Rs. 24 billion from Rs. 68 billion.
Wheat supply in Gilgit-Baltistan and PASSCO operations each receive Rs. 20 billion.
Other allocations include Rs. 9 billion for the EV scheme and Rs. 7.3 billion for the Islamabad Metro Bus.
The housing sector is allotted Rs. 10 billion, and the State Bank’s refinancing scheme gets Rs. 30 billion.
Rs. 1.2 billion has been allocated to the petroleum sector, while SMEs will receive Rs. 5.4 billion in support.
