Pakistan plans uniform gas tariff from July 2027

The Petroleum Division has decided to seek approval from the International Monetary Fund (IMF) for the implementation of a uniform gas tariff across Pakistan from July 1, 2027, as part of proposed reforms to the country’s gas pricing system.

Under the proposed plan, the government would have to abolish the existing cross-subsidy mechanism and allocate around Rs162 billion to provide targeted financial assistance to low-income households.

The reforms would replace Pakistan’s current 12-slab gas tariff structure. Under the existing system, consumers pay different rates depending on their monthly gas consumption. The proposed framework would gradually move all consumer categories towards a uniform average tariff.

The average tariff under the proposed system is expected to be around Rs1,708 per million British thermal units (MMBtu). The government plans to introduce the changes gradually to shift consumers from the existing slab-based pricing structure to a more uniform system.

The targeted assistance is intended to protect lower-income households from the impact of the tariff reforms after the cross-subsidy system is removed. The government will need to finalize the mechanism for identifying eligible households and providing them with financial support.

The Petroleum Division is seeking IMF approval for the proposed changes as the reforms are linked to Pakistan’s broader commitments to improve the energy sector and reduce distortions in gas pricing.

The proposed uniform tariff would represent a major change in the way gas prices are determined for domestic and other consumer categories. Further details, including the implementation mechanism and final tariff structure, are expected to be finalized following consultations with the relevant authorities and the IMF.