ISLAMABAD: The government has decided to gradually end the cross-subsidy of about Rs 140 billion currently extended to gas consumers, a move expected to make gas more expensive for domestic households.
Officials at the Petroleum Ministry confirmed that the subsidy phase-out will be completed by January 2027, in line with commitments made to the International Monetary Fund (IMF).
According to officials, the existing system of discounts on gas and electricity based on consumption slabs will be replaced with an income-based mechanism. Data from the Benazir Income Support Programme (BISP) will be used to identify low-income households, who will receive direct financial assistance instead of subsidized tariffs.
Sources revealed that preparations are underway to abolish the current distinction between “protected” and “non-protected” customers. A proposal to introduce a uniform average gas tariff for all consumers is under consideration, which would eliminate separate rates and streamline billing.
Officials noted that the decision aims to relieve the burden of cross-subsidies on industrial, commercial, CNG and cement sectors, which have long complained of inflated costs due to subsidized household tariffs. At present, the average gas tariff stands at around Rs 1,750 per mmbtu, while protected domestic consumers pay significantly lower rates.
The policy shift is expected to reshape Pakistan’s energy pricing framework, with analysts warning of inflationary consequences for households but acknowledging potential relief for industries struggling with high input costs.
