The federal government is considering lifting the ban on new gas connections amid strain on Pakistan’s gas infrastructure and its international commitments due to surplus in liquefied natural gas (LNG) supply.
It is worth mentioning that over 3.5 million applications for new gas connections are pending with Sui companies, while LNG underutilization and the shift of industry to petroleum have also contributed to a gas surplus.
According to a report by Dawn, citing official sources, the Ministry of Finance has proposed reconsidering the moratorium on new gas connections as part of broader efforts to manage the surplus in liquefied natural gas (LNG) supply. The current surplus is exacerbating pressure on Pakistan’s foreign exchange reserves, given the elevated cost of LNG imports.
The moratorium on new gas connections was initially imposed in 2009, partially lifted six years later, and then reimposed in 2022 due to escalating gas shortages.
The diversion of imported LNG, primarily to meet residential demand, has significantly contributed to the ongoing circular debt crisis in the gas sector. According to official estimates, gas utilities are incurring annual revenue losses exceeding Rs200 billion due to such diversions, which are supplied below cost.
Notwithstanding these challenges, over 100,000 new gas connections are reportedly expected to be issued in the fiscal year 2025–26. This decision aligns with a series of structural reforms being pursued to comply with International Monetary Fund (IMF) program requirements.
