ISLAMABAD: The federal government has approved a revision in gas pricing for the fiscal year 2025–26, raising fixed charges for domestic consumers and increasing average tariffs by approximately 10% for the power sector, bulk consumers, and general industry.
The decision was made during a meeting of the Economic Coordination Committee (ECC) held on Friday, which approved a summary submitted by the Petroleum Division. The revised structure comes into effect from July 1, 2025.
Under the new structure, fixed monthly charges for domestic gas users will increase by Rs150 for protected consumers and Rs400 for non-protected consumers. These fixed charges, the ECC stated, are aimed at recovering asset-related costs without altering per-unit gas prices for households.
Tariff adjustments will, however, impact bulk users, with rates for general industry (process) rising from Rs2,150 to Rs2,350 per million British thermal units (mmbtu), for the power sector from Rs1,050 to Rs1,313 per mmbtu, and for bulk consumers from Rs2,900 to Rs3,075 per mmbtu. Gas tariffs for public-sector power entities, such as Pakistan Petroleum Limited’s (PPL) supply to Guddu and Mari Petroleum’s supply to Foundation Power, have also been revised accordingly.
The ECC noted that prices for these sectors had remained unchanged since February 2023. The tariff hike is expected to generate Rs41 billion in additional revenue for the Sui Northern Gas Pipelines Limited (SNGPL), helping offset its current shortfall, while creating a Rs31 billion surplus for Sui Southern Gas Company (SSGC), which will be used to address its accumulated revenue deficit of approximately Rs565 billion.
The ECC was informed that the current domestic pricing structure contains significant cross-subsidies estimated at Rs168 billion annually. While this remains unchanged in the current round of reforms, the government is developing a framework to eventually replace cross-subsidies with targeted, budgeted subsidies based on income levels through the Benazir Income Support Programme (BISP). This framework is expected to be finalized by June 2026 and rolled out in 2027 under broader IMF-supported energy reforms.
To minimise the burden on domestic consumers, the ECC opted to restrict price adjustments to fixed charges, while redirecting revenue recovery toward industrial and power sector segments with higher consumption and pricing capacity.
The government reiterated its commitment to gradual subsidy reform and financial sustainability in the energy sector, in line with ongoing IMF programmes, including the Resilience and Sustainability Facility.
