Increased Fixed Charges for Domestic Gas Users Imposed by the Pakistani Government
Get Ready, Gas Prices Are Changing!
Here's the Lowdown:
The Federal government of Pakistan has given the green light to a significant overhaul in the gas prices for both domestic and commercial consumers, effective from July 1, 2025. The Economic Coordination Committee (ECC), in its meeting on Friday, backed the proposal made by the Petroleum Division, reinforcing a revised pricing structure for the fiscal year 2025-26.
Breaking Down the Changes:
For domestic consumers, the good news is that the per-unit gas prices will stay the same to protect household budgets. However, the not-so-great news is that the fixed charges for consumers, both protected and non-protected, will see a rise – an increase of Rs150 for protected consumers and Rs400 for non-protected consumers starting from July 1, 2025[1][2][4].
As for bulk consumers, they're looking at an roughly 10% hike in gas tariffs, with a shift from Rs2,900 per MMBtu to Rs3,075 per MMBtu[4]. The increase is the result of cost recovery and regulatory compliance requirements[2][3].
Industrial consumers, including power plants and general industry, will also experience a 10% increase in overall gas prices[4][5]. Power sector tariffs will be revised to Rs1,313 per MMBtu, while general industry (process) tariff will rise to Rs2,350 per MMBtu[4][5].
Clearing the Air on Cross-Subsidies:
These price adjustments align with Pakistan's agreement with the IMF to rationalize tariffs and cut down on cross-subsidies while ensuring targeted assistance to low-income consumers through social safety programs like BISP[1][2][3]. The government intends to offset the additional burden on protected consumers through disbursements under the Benazir Income Support Programme (BISP)[1].
The Final Take:
From July 1, 2025, you can expect the following changes:- Domestic consumers face no increase in unit prices but an increase in fixed charges.- Bulk consumers grapple with a roughly 10% rise, with costs going up from Rs2,900 to Rs3,075 per MMBtu.- Industrial consumers and power plants also face a 10% increase, with prices adjusting accordingly (e.g., power sector to Rs1,313 per MMBtu, general industry to Rs2,350 per MMBtu)[1][2][3][4][5].
[1] Government Works Towards Rationalizing Gas Prices[2] Economic Coordination Committee Approves Gas Price Hike for Bulk, Industrial Consumers[3] IMF Supports Pakistan's Reforms to Streamline Fuel Prices[4] Revised Gas Tariff Rates for 2025-26 Unveiled[5] Power Sector Braces for 10% Gas Tariff Increase
- In the energy industry, starting from July 1, 2025, domestic consumers will encounter an increase in fixed charges, while per-unit gas prices will remain the same, a move aimed at controlling household budgets.
- The financing sector will closely watch the defi industry as industrial consumers, including power plants and general industry, will face a 10% increase in overall gas prices, with power sector tariffs adjusting to Rs1,313 per MMBtu, and general industry tariff rising to Rs2,350 per MMBtu, from July 1, 2025.
- The decision to revise gas prices across the industry, with a 10% increase for bulk consumers and a shift in costs from Rs2,900 to Rs3,075 per MMBtu, is part of Pakistan's commitment to the International Monetary Fund (IMF) to rationalize tariffs and eliminate cross-subsidies while ensuring targeted assistance to low-income consumers.
