# **IV. Social and Gender Impacts of Energy Subsidies and Reform**

To examine issues related to energy access and affordability for low‐ and lower middle‐ income households, and to inform the design of subsidy reforms in a politically and welfare‐ sensitive way, a qualitative study was commissioned and supervised by the World Bank and carried out by a local research firm. The study took place in three provinces of Pakistan in May and June 2015. The firm conducted focus group discussions (FGDs) with 400 participants from six districts, stratified by income group (low‐income and lower middle income), gender, and location (urban and rural).<sup>12</sup> In addition, FGDs were held with BISP beneficiaries and _katchi abadi_ (slum) residents. All participants had an electricity connection (either legal or illegal). In all, 44 FGDs took place, each with 8‐10 participants. The discussions covered a range of topics related to energy usage, affordability and service quality, and explored attitudes toward subsidy reforms and compensation. Following each FGD, an individual participant was randomly selected to participate in an ethnographic interview (EI) to discuss the issues in more detail. Finally, the study included 12 interviews with BISP officers and energy company representatives, in order to get a government perspective on the issues raised. Further details on the methodology and survey instrument are provided in the Appendix (part F).

## **Energy Use and Spending Patterns**

Electricity is central to the lives of households and households use a variety of electrical appliances. Nearly all households mentioned using electricity for lighting. While the type of electrical appliances used by households depends on welfare level and location, nearly all participants indicated that they use electric fans in their homes. Most BISP beneficiaries and _katchi abadi_ residents (the poorest groups interviewed) reported using washing machines, fridges, irons, TVs and mobile phone chargers. Lower middle‐income households reported using a variety of electrical appliances, including personal computers, evaporative coolers, juicers, vacuum cleaners and sewing machines. More than half of the research participants mentioned using electric pumps to fill household water tanks. Although these water pumps consume a limited amount of electricity, the household water supply is interrupted if load shedding occurs when tanks are empty. Respondents engaged in farming also mentioned using electric pumps for tube‐well irrigation. While farmers have relatively higher electricity use on average for this reason, households residing in rural areas use slightly less electricity on average than their urban counterparts due to lower rates of appliance use (Figure 7). This is not just due to lower living standards: during the summer months, rural families can sleep outside at night, and thereby avoid the need for electric cooling.

> 12 The average monthly income of participants varies based on province and location. Overall, the reported average monthly income of low‐income respondents was between Rs 13,050 and Rs 14,675, representing the first and second quintiles according to 2011‐2012 PSLM. The average monthly income of lower middle income participants ranged between Rs 19,700 and Rs 22,000, corresponding to the 3<sup>rd</sup> and 4<sup>th</sup> quintiles according to 2011‐2012 PSLM/HIES.

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