Rethinking electricity tariffs and subsidies in Pakistan
The global oil crisis of 2008 increased the fiscal burden of maintaining generous subsidies that have existed for decades. More recently, these subsidies have been the driving force of ever more precarious fiscal imbalances. In response, the government of Pakistan increased electricity tariffs significantly in nominal terms, but a challenge of such adjustments is how to minimize their impact on the poor and vulnerable. Using household survey data, this report studies the distributional and fiscal implications of the recent tariff adjustments, more specifically adjustments between March 2008 and March 2011, to inform policy dialogue on the provision and targeting of electricity subsidies.