The government is considering additional gas tariff slabs to bring more consumers into the protected category and give them access to lower gas rates, following a directive from the Cabinet Committee on Energy (CCOE).
The CCOE has asked the Ministry of Energy’s Petroleum Division to examine a more rational classification of protected consumers.
The move comes as the government works to contain gas sector circular debt, which World Bank and KPMG assessments said rose sharply between 2019 and 2023, mainly due to delayed gas price increases and diversion of RLNG to domestic consumers.
The Petroleum Division said the debt has continued to grow as Sui gas companies recover less than the value of gas they supply, while power sector issues add to the financial pressure. The rising debt has also weakened the ability of state-owned exploration and production companies to invest in their core businesses.
Key factors include delayed consumer gas price revisions from 2013 to 2022, gaps between OGRA-determined revenue requirements and Sui company collections, low power sector recoveries, winter diversion of RLNG to domestic consumers from 2018 to 2023, inadequate subsidy allocations, and pending GST refunds from the FBR.
The division also cited litigation over consumer gas price notifications, lower demand from captive power plants and CNG stations, and RLNG tariff actualization from February 2025.
It said circular debt rose sharply between June 2019 and June 2023 before showing a flatter trend through June 2026, while SSGC’s bill recovery issues in Balochistan require high level engagement.
To ease the financial pressure, the Petroleum Division sought settlement of power sector receivables against domestic gas, RLNG and oil supplies, including Rs. 42 billion in RLNG actualization charges. It also sought Rs. 83 billion in GST refunds from the FBR and Rs. 160 billion in budgetary support to eliminate domestic cross subsidies and provide relief to industry.
The CCOE directed authorities to resolve power sector receivables, tax refunds and subsidy funding issues in consultation with stakeholders. The Finance Division said the gas sector Circular Debt Management Plan would also be discussed with the IMF during the September loan program review.
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