ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) has notified a significant upward revision in gas prices across multiple consumer categories, with the new tariffs set to take effect from July 1, 2025.
The decision, issued under federal government directives, is aimed at ensuring full cost recovery for gas utilities, rationalizing subsidies, and containing the mounting circular debt in the energy sector. However, the impact of the hike is expected to be deeply felt by domestic, industrial, fertilizer, and power sector consumers, with some categories facing tariff hikes of up to 300 percent.
While per-unit gas prices for household users remain unchanged, fixed monthly charges have been significantly increased, which will notably raise overall gas bills—particularly for high-usage households.
Protected residential consumers—those using up to 90 cubic meters per month—will now pay a fixed charge of Rs 600, up from Rs 400, marking a 50 percent increase. Non-protected domestic consumers, who fall outside the subsidy regime, will pay Rs 1,500 per month, instead of the previous Rs 1,000.
For households consuming more than 15 cubic meters per month, the fixed charge has jumped to Rs 3,000, reflecting a 200 percent increase. These changes are expected to burden middle- and upper-income urban households, especially during peak winter months when gas consumption typically rises.
For the industrial and power sectors, OGRA has notified steep increases in gas prices. For the power generation sector, the tariff has been raised by 16.66 percent, from Rs 1,050 to Rs 1,225 per MMBTU—an increase of Rs 175. General industrial users will now pay Rs 2,300 per MMBTU, up by Rs 150, while captive power plants—industries that generate their own electricity using gas—will be charged Rs 3,500 per MMBTU.
The fertilizer sector has witnessed one of the most dramatic hikes. Fertilizer plants operating under the 2001 Fertilizer Policy—primarily Engro Fertilizer and Fatima Fertilizer—had been receiving gas at highly subsidized rates between Rs 300 and Rs 350 per MMBTU.
Under the new regime, their gas tariff has been revised to over Rs 1,200 per MMBTU, reflecting an increase of Rs 850 to Rs 900, or approximately 250 to 300 percent.
This adjustment is expected to impact urea production costs and could lead to either higher consumer prices or further government subsidies.
OGRA has also revised the average prescribed prices for the country’s two main gas utilities. The rate for Sui Northern Gas Pipelines Limited (SNGPL) has been increased by Rs 235.34 per MMBTU, taking it to Rs 1,635.90.
For Sui Southern Gas Company Limited (SSGCL), the prescribed price has gone up by Rs 206.29 to Rs 1,401.25. These adjustments represent average increases of approximately 17 percent and reflect the urgent need to address revenue shortfalls, unpaid subsidies, and mounting financial pressure on the gas utilities.
The new pricing regime, framed under Section 8(3) of the OGRA Ordinance, 2002, is based on policy guidelines from the Petroleum Division of the Ministry of Energy. It also aligns with the government’s uniform gas pricing policy to ensure that similar categories of consumers pay the same rates, irrespective of the gas utility serving them.
The tariff structure includes revised cross-subsidies, placing a greater cost burden on high-end and high-usage consumers while maintaining relief for low-income, protected segments.
Sources in the industry said that the government is expected to generate more than Rs 300 billion in additional revenue from these changes during fiscal year 2025–26.
According to OGRA spokesperson, the new pricing regime will not affect per-unit gas prices for domestic (household) consumers. However, the fixed monthly charges have been revised upward. For protected consumers, fixed charges have been increased from Rs 400 to Rs 600, while non-protected domestic consumers will now pay Rs 1,500, up from Rs 1,000.
Moreover, in cases where a household consumes more than 15 cubic meters of gas in a month, the fixed charges have been hiked further to Rs 3,000, marking a substantial increase aimed at high-usage consumers.
