The federal government of Pakistan is preparing to implement a significant hike in fixed charges on domestic gas bills, with increases of up to 50% set to take effect from July 1, 2025.
This adjustment is part of a broader strategy to recover infrastructure costs and meet fiscal targets outlined in the upcoming 2025–26 budget.
Under the revised structure approved by the Economic Coordination Committee (ECC), the fixed monthly charges for domestic gas consumers will rise as follows:
- From Rs 400 to Rs 600
- From Rs 1,000 to Rs 1,500
- From Rs 2,000 to Rs 3,000
These charges are levied regardless of actual gas consumption and are intended to cover the cost of maintaining pipelines, meters, and other infrastructure.
The government has opted to keep per-unit gas tariffs unchanged for household consumers to avoid exacerbating inflation. Instead, it is focusing on fixed charges as a more stable revenue stream. This move aligns with International Monetary Fund (IMF) recommendations to reduce energy-sector subsidies and implement cost-reflective pricing.
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The gas sector’s circular debt, which has ballooned to over Rs. 2.85 trillion, is a key driver behind the decision. By increasing fixed charges, the government hopes to ease the financial burden on gas utilities and reduce reliance on external borrowing.
While the per-unit gas rate remains unchanged, the increase in fixed charges will impact all domestic consumers, especially those in higher usage brackets. However, protected consumers typically low-income households using minimal gas may still benefit from subsidized rates, though they too will see a rise in their base charges.
- Revenue Generation:
The hike is expected to generate billions in additional revenue for the government, helping to stabilize the energy sector.
- Public Reaction:
Consumer advocacy groups have expressed concern that the increase will disproportionately affect middle-income families already grappling with rising utility costs.
- Future Adjustments:
The government is also considering a fuel price adjustment mechanism for gas bills, similar to electricity bills, which could lead to monthly or quarterly revisions in the future.
This policy shift reflects a delicate balancing act: meeting fiscal obligations while attempting to shield the public from full-scale tariff hikes. Whether it succeeds in easing the energy sector’s
financial woes without triggering public backlash remains to be seen.