Govt raises gas prices by 10% for commercial users
Finance Minister Muhammad Aurangzeb chairs the Economic Coordination Committee meeting of the Cabinet on Friday, June 27, 2025. Photo: APP
In line with structural benchmarks set by the International Monetary Fund (IMF), the Economic Coordination Committee (ECC) of the Cabinet on Friday approved a new natural gas pricing framework, including an average 10 per cent tariff hike for bulk, industrial and power sector users.
Meanwhile, to shield domestic users from additional burden, the ECC decided to maintain existing gas prices for households while allowing an upward revision of fixed charges in the domestic sector to recover asset costs.
Chaired by Finance Minister Muhammad Aurangzeb, the ECC also approved a summary moved by the Petroleum Division for a revised pricing structure to take effect from July 1, 2025, under the fiscal year 2025–26.
Under the new framework, the government will notify revised consumer gas prices within 40 days of a determination by the Oil and Gas Regulatory Authority (OGRA), as required under the OGRA Ordinance.
Read More: OGRA greenlights hike in gas price
The pricing mechanism is aimed at ensuring cost recovery, regulatory compliance, and fulfilling IMF commitments, including rationalising captive power tariffs and replacing cross-subsidies with targeted support for low-income consumers.
In other decisions, the ECC gave in-principle approval to a risk coverage scheme for small farmers and underserved areas, set to launch on August 14. The scheme aims to bring 750,000 new borrowers into the formal financial system through agricultural loans of up to Rs750,000.
A total of Rs300 billion in new agricultural lending will be disbursed over the next three years. For risk coverage and administrative costs of banks, Rs37.5 billion will be required between FY2027 and FY2031.
Also Read: Double-digit fuel inflation looms
The ECC also approved a Rs15.839 billion technical supplementary grant (TSG) for the Ministry of Defence to meet a shortfall in employee and non-employee-related expenditures. The allocation covers dues under the Prime Minister's package for the families of martyrs from the recent Pakistan-India conflict.
Additionally, the committee considered a proposal from the Ministry of National Food Security and Research for the import of sugar to stabilise domestic prices.
The meeting was attended by Minister for Power Sardar Awais Leghari, Minister for Petroleum Ali Pervaiz Malik, and Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan, among other senior officials.
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Govt raises gas prices by 10% for commercial users
Finance Minister Muhammad Aurangzeb chairs the Economic Coordination Committee meeting of the Cabinet on Friday, June 27, 2025. Photo: APP In line with structural benchmarks set by the International Monetary Fund (IMF), the Economic Coordination Committee (ECC) of the Cabinet on Friday approved a new natural gas pricing framework, including an average 10 per cent tariff hike for bulk, industrial and power sector users. Meanwhile, to shield domestic users from additional burden, the ECC decided to maintain existing gas prices for households while allowing an upward revision of fixed charges in the domestic sector to recover asset costs. Chaired by Finance Minister Muhammad Aurangzeb, the ECC also approved a summary moved by the Petroleum Division for a revised pricing structure to take effect from July 1, 2025, under the fiscal year 2025–26. Under the new framework, the government will notify revised consumer gas prices within 40 days of a determination by the Oil and Gas Regulatory Authority (OGRA), as required under the OGRA Ordinance. Read More: OGRA greenlights hike in gas price The pricing mechanism is aimed at ensuring cost recovery, regulatory compliance, and fulfilling IMF commitments, including rationalising captive power tariffs and replacing cross-subsidies with targeted support for low-income consumers. In other decisions, the ECC gave in-principle approval to a risk coverage scheme for small farmers and underserved areas, set to launch on August 14. The scheme aims to bring 750,000 new borrowers into the formal financial system through agricultural loans of up to Rs750,000. A total of Rs300 billion in new agricultural lending will be disbursed over the next three years. For risk coverage and administrative costs of banks, Rs37.5 billion will be required between FY2027 and FY2031. Also Read: Double-digit fuel inflation looms The ECC also approved a Rs15.839 billion technical supplementary grant (TSG) for the Ministry of Defence to meet a shortfall in employee and non-employee-related expenditures. The allocation covers dues under the Prime Minister's package for the families of martyrs from the recent Pakistan-India conflict. Additionally, the committee considered a proposal from the Ministry of National Food Security and Research for the import of sugar to stabilise domestic prices. The meeting was attended by Minister for Power Sardar Awais Leghari, Minister for Petroleum Ali Pervaiz Malik, and Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan, among other senior officials.
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Under the OGRA Ordinance, the federal government is required to notify revised consumer gas prices within 40 days of OGRA's determination to ensure cost recovery and regulatory compliance. The submission also aligns with structural benchmarks agreed with the International Monetary Fund (IMF), including rationalization of captive power tariffs and a shift from cross-subsidies to direct, targeted support for low-income consumers. The ECC considered the proposed adjustments in energy sector tariffs and decided to maintain gas prices to protect household consumers with only fixed charges re-adjusted in domestic sector to recover the asset costs. It also allowed price of gas for bulk consumers, power plants operating on natural gas and industry to be increased by an average value of around 10 percent. The ECC also considered a proposal brought on by the Ministry of National Food Security and Research (MNFSR) for import of sugar to stabilize the sugar prices. 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The budgetary requirement for meeting risk coverage and operational cost of the banks is estimated to be Rs 37.5 billion, spread over fiscal year 2027 to fiscal year 2031. The meeting was attended by several key federal ministers, including Minister for Power, Sardar Awais Ahmed Khan Leghari, Minister for Petroleum Ali Pervaiz Malik, Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan, and senior officials from various ministries and divisions were also present.
