The Ministry of Petroleum has initiated work on a uniform gas tariff system. Approval for the policy governing this uniform tariff will be sought from the IMF. Implementation of the uniform tariff policy will eliminate the existing slab-based system in the gas sector.

According to sources, there is a proposal to abolish the current gas tariff system, which consists of 12 slabs, and work has begun on a plan to implement a single gas tariff starting July 1, 2027.

A plan to set an average gas tariff of Rs. 1,708 per MMBtu for all consumers is under consideration. There is a proposal to provide subsidies to low-income, deserving individuals based on income rather than gas consumption. The existing gas subsidy system is set to be abolished, with a proposal to make income the criterion for relief.

It is worth noting that Pakistan has pledged to the IMF to eliminate cross-subsidies; the proposal involves linking gas subsidies to income rather than consumption levels. Household income will become the benchmark for obtaining relief on gas charges, and financial assistance will be provided to consumers through the Benazir Income Support Programme (BISP).

Under the current system, low-consumption consumers receive gas at very low rates; “protected” consumers currently pay between Rs. 200 and Rs. 350 per MMBtu. A sum of Rs. 162 billion will be allocated in the budget to facilitate the elimination of cross-subsidies.

The implementation of the new policy is expected to lead to a significant increase in rates for domestic consumers, while a substantial reduction in gas rates is anticipated for the industrial and commercial sectors.