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LAHORE: A toxic haze shrouded Pakistan’s eastern city of Lahore on Thursday, with the air quality reading largely in the “very unhealthy” category for the first half of the day.

According to data from the Swiss monitoring group, IQAir, the city’s Air Quality Index (AQI) reached a high of 255 at around midnight local time (1900 GMT, October 22), which is in the “very unhealthy” category. 

The AQI reading improved slightly at around noon local time (0700 GMT), when it moved into the “unhealthy” category at 190.

Lahore deals with smoggy conditions and poor air quality in the winter months, a phenomenon that is also common in other parts of South Asia. During this time, cold, heavy air traps pollutants, including vehicle emissions, industrial smoke and dust.

The seasonal crisis is often exacerbated by agricultural burning and, this week, by firecrackers set off during Diwali, the Hindu festival of lights mostly celebrated in India, on Monday (October 21). 

ISLAMABAD: Pakistan on Thursday unveiled a three-year electricity subsidy for its industrial and agricultural sectors, offering power at Rs22.98 ($0.08) per unit under a new “Roshan Maeeshat Bijli Package,” the prime minister’s office said. 

The plan aims to boost exports, create jobs, and revive economic growth, even as Islamabad pursues IMF-mandated energy reforms to reduce losses and phase out untargeted subsidies.

Under the package, industries and farmers will receive additional electricity at reduced rates from November 2025 to October 2028. Existing tariffs of Rs34 ($0.12) per unit for industry and Rs38 ($0.14) for agriculture will be lowered to Rs22.98 ($0.08) to make Pakistani products more competitive in regional markets.

“The electricity supplied under the Roshan Maeeshat Bijli Package will not place any burden on households or other sectors,” Sharif was quoted as saying in a statement released by his office, adding that economic revival and job creation required relief for productive industries and farmers.

He called the initiative “a timely measure to strengthen Pakistan’s economy and ensure growth in exports and employment,” saying industrial and agricultural growth was key to reducing the country’s debt dependency.

During last winter’s pilot phase of the package, industries and farmers consumed an additional 410 gigawatt-hours of power, helping boost production and exports while creating new employment opportunities, according to official data.

“By supporting our farmers and industries with affordable energy, we will accelerate growth and move toward self-reliance,” Sharif said, adding that with continued efforts from the government’s economic team and the business community, Pakistan would achieve “full economic sovereignty in the near future.”

Pakistan’s energy sector remains one of its biggest economic challenges, marked by high generation costs, heavy subsidies and a mounting “circular debt” that stood at about Rs2.396 trillion ($8.6 billion) by end-March 2025.

Under the 37-month, $7 billion IMF Extended Fund Facility approved in September 2024, Islamabad committed to restoring cost recovery in the power sector, cutting line losses, and phasing out untargeted energy subsidies. The Fund has repeatedly urged Pakistan to align tariffs with actual supply costs and limit fiscal support to targeted, time-bound relief programs.

To ease financial pressures on state-run power distributors, the government secured a Rs1.275 trillion ($4.6 billion) syndicated financing deal with local banks in June 2025 to offset part of the debt.

With industrial growth constrained by repeated tariff hikes and erratic power supply, business groups have long warned that high energy costs make Pakistani goods uncompetitive in global markets.