ISLAMABAD: Pakistan’s government is considering passing the benefits of lower-cost local gas production on to consumers, a move that could lead to relief in gas tariffs for households and businesses.

Federal Minister for Petroleum Ali Pervaiz Malik said the government is reviewing gas pricing in light of the increased use of locally produced gas, which is significantly cheaper than imported liquefied natural gas (LNG). A summary on revised local gas pricing is expected to be presented to the federal cabinet for approval.

Speaking about the country’s energy situation, the minister said LNG supplies were temporarily disrupted during recent regional tensions involving the United States, Israel and Iran. To meet domestic energy demand, Pakistan increased its reliance on locally produced gas, particularly in the power sector.

According to Malik, locally produced gas costs around Rs2,000 per million British thermal units (MMBTU), compared with approximately Rs3,500 per MMBTU for imported LNG. The lower cost helped reduce pressure on the energy system and limited additional financial burdens on consumers.

The minister said local gas production was increased by nearly 400 million cubic feet per day during the LNG supply disruption to ensure uninterrupted energy supplies across the country.

Circular debt reforms under consideration

Malik also said the government is working on proposals to address long-standing circular debt challenges in the gas sector. The measures are aimed at improving the financial health of the energy sector and reducing the debt burden on gas companies.

The federal cabinet is expected to review the proposed gas pricing framework before a final decision on any tariff adjustments is announced.

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