Govt hints at uniform gas pricing, says existing system needs to be 'revisited'

Govt hints at uniform gas pricing, notes existing system needs to be 'revisited'.

Key points

• Khaleeq Kiani Published August 27, 2026 Updated August 27, 2026 01: 00pm.
• On Thursday, the matter came under discussion as Petroleum Minister Ali Pervaiz Malik met with the Sui Southern Gas Company's (SSGC) board of directors.
• Petroleum Secretary Hamed Yaqoob Sheikh, during the session, emphasised that the board operated independently in accordance with the spirit of the State-Owned Enterprises (SOE) Act.
• Nevertheless, gas is sold to consumers at different rates, ranging from Rs500 to Rs4, 300 per mmBtu as consumption rises.
• Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and throughout the world.

Khaleeq Kiani Published August 27, 2026 Updated August 27, 2026 01: 00pm. Join our Whatsapp Channel. Add Dawn as a trusted source.

ISLAMABAD: The administration on Thursday hinted at introducing a uniform average gas rate for all consumers, replacing the existing slab-based pricing system for different categories that involves cross-subsidies and budgetary subsidies.

Meanwhile, the average prescribed gas cost, determined by the Oil and Gas Regulatory Authority (Ogra) based on the revenue requirements of gas businesses, at present stands at around Rs1, 700 per million British thermal units (mmBtu). Nevertheless, gas is sold to consumers at different rates, ranging from Rs500 to Rs4, 300 per mmBtu as consumption rises.

Notably, the regulator and the International Monetary Fund have asked the administration to eliminate subsidies, recover the true cost of gas supply from all consumers and provide direct subsidies where necessary.

"The existing system of gas subsidies via pricing slabs needs to be revisited, " the minister was quoted as saying in an official statement.

While vulnerable segments be protected through targeted social protection programmes, "He emphasised the need to transition to a single, fair gas cost for all consumers. This transition would spur greater economic activity while quelling migration of customers to alternative fuels, " the statement remarked.

He directed the SSGC board to develop a comprehensive strategy and sustainable business model, with a special focus on controlling unaccounted-for gas (UFG), to transform the firm into a financially viable organisation while keeping public service as its foremost priority.

Notably, the session, which he presided over, additionally reviewed the company's performance, key achievements, operational challenges and future reform priorities.

Meanwhile, the SSGCL managing director briefed the minister on the company's milestones, achievements and challenges. The management highlighted a significant improvement in the gas distribution system, with UFG reduced by approximately 57 per cent in volumetric terms.

While domestic consumers were being provided gas three times a day, the session was informed that there was no gas loadshedding for K-Electric, industrial consumers and fertiliser plants.

While the accumulation of gas circular debt had almost been halted, marking notable progress towards stabilising the gas sector, malik highlighted that gas rates had not been climbed for the past year.

He remarked Ogra had determined a reduction in prescribed gas costs, but the administration had absorbed the impact, resulting in a reduction of around Rs55 billion in gas circular debt.

He pressed the SSGC board to formulate a comprehensive business reform strategy focused on making the business self-sustaining, improving operational efficiency, reducing losses and gas theft, strengthening revenue recovery and ensuring better utilisation of resources.

Petroleum Secretary Hamed Yaqoob Sheikh, during the session, emphasised that the board operated independently in accordance with the spirit of the State-Owned Enterprises (SOE) Act. He remarked the board should exercise its mandate and take all necessary measures to improve the efficiency and ensure the long-term sustainability of SSGC.

In practice, the minister remarked the administration was already working with the World Bank on comprehensive gas sector reforms, aimed at addressing structural challenges and creating a more efficient, sustainable and financially viable gas sector.

Discussing the situation in Balochistan, the SSGC board welcomed the constitution of a political committee under Deputy Prime Minister and Foreign Minister Ishaq Dar to examine the province's challenges, describing the initiative as a positive step towards addressing its longstanding problems.

For context, the minister directed that gas supply problems in Balochistan be addressed on a priority basis, along with technical challenges, infrastructure constraints and gas theft. He stressed the need for sustainable solutions to improve gas availability and service delivery in the province.

While reforms should be pursued to ensure the company's long-term sustainability, the minister continued that public service must remain the top priority in all operational, financial and strategic decisions.

Khaleeq Kiani is an Islamabad-based reporter for Dawn, specializing in political economy, governance, business, finance, macroeconomics and energy. He can be discovered on X at @khaleeqkiani.

Taken together, the developments around govt hints at uniform gas pricing, says existing system needs to be point to a situation that is still moving, and the coming days should bring more clarity.