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Domestic gas consumers may face higher bills as the government has decided to end the nearly Rs140 billion cross-subsidy currently provided in the gas sector.
According to Petroleum Ministry officials, the subsidy will be phased out by January 2027 as part of gas-sector reforms assured to the IMF.
Sources said the government has decided to abolish the Rs140 billion cross-subsidy given to gas consumers.
After electricity, gas is also likely to become more expensive for domestic consumers as the existing tariff support system is gradually withdrawn.
Relief to be linked with income
Officials said concessions on gas and electricity will no longer be given on the basis of consumption levels.
Instead, relief will be provided according to consumers’ income, ensuring that only deserving and low-income households receive support.
The government plans to use Benazir Income Support Program data to identify low-income households. Officials said deserving consumers will be provided direct financial assistance instead of cheaper gas through the current tariff structure.
Protected and non-protected tariff system
Sources said preparations are underway to end the existing system of separate tariffs for protected and non-protected gas consumers.
At present, protected consumers are receiving gas at rates much lower than the average tariff.
A proposal to charge a uniform average gas tariff from all consumers is also under consideration. According to officials, the current average gas tariff is around Rs1,750 per MMBTU.
Industries, commercial sectors
The move is expected to end the burden of cross-subsidies currently placed on industries, CNG, commercial and cement sectors.
Officials said the reform is part of the government’s commitment to complete gas-sector restructuring under assurances given to the IMF.
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